Book Review:

There are some books that rehash and some that break new ground. Some are read once only to collect dust henceforth and some that are worn with use. Steve Nissan and his comprehensive work on candlestick charting, Japanese Candlestick Charting Techniques - A Contemporary Guide to the Ancient Investment Techniques of the Far East provides both a book of interest as well as of reference. In just fifteen short years, candlestick charting moved from the esoteric to mainstream and Nison's popularization the techniques had a major impact on that movement.

Nison introduces us to candlestick charting with a little history regarding its origin and uses and from there moves quickly through the basics of how to draw and read them. From there on, it is roughly 200+ pages of candles, with each pattern clearly described, the rules governing the pattern explicitly called out, and the importance of pattern hammered home.

From reversal patterns (both bullish and bearish) to stars and continuation patterns, Nison takes us through the world of mostly common names used to identify and ascertain who is likely to win the next battle between buyers and sellers.

The final chapters are devoted to combining candlestick patterns with Western technical analysis techniques in an attempt to increase the traders odds of being correct with their interpretations of the patterns they see unfolding on the charts.

There are other books on candles, but Nison's book has become the gold standard and it indeed has a right to be just that. Like Edwards and Magee's, Technical Analysis of Stock Trends, Japanese Candlestick Charting Techniques deserves a place on your bookshelf - just make sure that reserve a spot within arms reach as you'll be accessing it repeatedly.

Reviewed by L.A. Little on 5/10/2009