This is a very intelligent post by Brownsfan. Most specifically these few words.
I now 'get' what candlesticks do... I understand what the candles are 'saying'. It's much more than hunting for shapes, which is what many noobs do and then claim that candles do not work...
If someone would take the time to really think about that statement they may reap great rewards. That is the real key to the method part of your trading plan. There are three parts to trading mind,money,and method. That statement deals exclusively with method and to be successful one must master all three not just one.
Now dealing with the actual statement. I now 'get' what candlesticks do... I understand what the candles are 'saying'. It's much more than hunting for shapes, which is what many noobs do and then claim that candles do not work...
Steve Nisons book is a great place to start and learn about the candles. However, I think that he doesn't elaborate to much on how to really trade the candles. This is no real fault of his because its next to impossible to really explain it. Its similar to having a child learn to ride a bike by reading a book. It simply wont help. The child must internalise how to ride a bike from genuine practise not stimulation of his brain from book knowledge. Nisons only real suggestion is trade the candles when a confluence of things are lining up at the same time and always trade in the direction of the major trend. I personally think this is a real good idea for active investing but not trading. These type of occurrences are rather rare, it doesn't provide enough frequency to trade like a professional. A professional knows that any trade can very easily fail therefore his job is altogether different than what most traders think it really is. His real job is to intelligently increase his sample size so that his confirmed edge has ample opportunity to play its self out and deliver its statistically reliable results.In my mind trading is not a game, or a skill, or a competition, or any other thing that most traders like to call it and get their ego involved. Trading is simply having an edge and letting the edge work by itself for you. Most people really believe that over trading is bad or wrong. This is of course true if you are incompetent. On the other hand if you are qualified over trading is your best friend because it allows you to increase your sample size. Enough rambling here is my suggested reading and it cant be done in only one book. However, it could be done in only five.
Mind- 1. Trading in the Zone
Mark Douglas 2. Reminisces of a Stock Operator Edwin Lefreve
Method- 3. Japanese Candlestick Charting Techniques
Steve Nison 4. John Murphy's book on technical analysis (I cant think of the correct name off the top of my head)
Money- Trade your way to financial freedom Van Tharp