Bonus Handouts

Interactive Q and A companion for video workshop

“Secrets of Becoming a Samurai Trader: Advanced
Candlestick Charting Techniques” – with Steve Nison

These extra handouts (which are not part of the

video) will help test and refine your candlestick
and trading skills.
Please print these and then answer the
questions. Answer handouts are included at the
back this bonus section.
Interactive Practice
Questions
Interactive Question 1- Match the patterns on the left with the number of candle
lines on the right:

a) Hammer -
b) Shooting star -
c) High wave candle - 1) one candle line
d) Hanging man -
2) two candle lines
e) Dark cloud cover -
f) Piercing pattern - 3) three candle lines
g) Bearish engulfing pattern -
h) Bullish engulfing pattern - 4) four or more candle lines
i) Tweezers top -
j) Tweezers bottom –
k) Harami -
l) Evening star -
m) Morning star –
n) Falling window -
o) Rising window -
Interactive Question 2
2
LIBERTY FIN
15.00
14.95

3 14.90
14.85
14.80
14.75
14.70
14.65
14.60
14.55
14.50
14.45
14.40
14.35
14.30
1 14.25
14.20
14.15
14.10
14.05
14.00
13.95
13.90
13.85
13.80
13.75
13.70
1) Which northern doji 13.65
13.60
is bearish and why? 13.55
13.50
13.45
2) What pattern is 13.40
13.35
completed at 3? 13.30
13.25
13.20
13.15
13.10
13.05
13.00
20 21 24 26 27 28 31 2 3 4 7 8 9 10 11 14 15 16 17 18 22 23 24 25 28 29 30 31
2002
Interactive Question 3
FED DEPT STRS 44.5

44.0

During this time, the

43.5
market is ascending.
However, what are 43.0
three reasons for
caution? 42.5

42.0

41.5

41.0

40.5

40.0

39.5

39.0

38.5

4 11 18 25 1 8 15 22 29 6 13 20 28 3
March April May June
Interactive Question 4

1) Name the two

reversal signals at
the arrows.
2) Would you use
these signals to sell
short?
3) What is bearish
confirmation of
these potential
reversal signals?
Interactive Question 5
1) What pattern is this?
2) Make a blended candle of this pattern
Interactive Question 6
AMER EAGLE OUTF

3 27.0

2 26.5

26.0

25.5

1
25.0

24.5

24.0

1) Looking at the preceding trend, what is the difference between 23.5

the bearish engulfing patterns at 1 and 2?
23.0
2) Which is more likely a top reversal?
3) Where is resistance after bearish engulfing pattern 2? 22.5

4) Was there a bullish engulfing pattern formed on April 22 and

23 (shown by the semi circle at 3)? 22.0

8 15 22 29 6 13 20 27
May
Interactive Question 7

Highlight the rising and falling

windows with their respective
support and resistance areas.
Point out the sessions when the
window’s support or resistance are
broken.
Interactive Question 8
1) Highlight the three rising windows before candle line 1

A on March 22
2) Based on these rising windows, where would support
levels be? If the first support at the top rising window was
broken, where would we expect next support?
1 3) What is the candle at line X?
4) If one buys at line X, where is a potential resistance
area (hint: connect highs from A and B)
5) Based on the question above, would a buy on the close
of line X present an attractive risk reward?

x
Interactive Question 9

1) What is the pattern at A?

2) What were the two aspects

that made pattern A a more
likely bottom reversal?

3) After the week of October 8

why was there support near
$23?

A
Interactive Question 10

Name the patterns at 1

to 5 confirming a
support area?

d e
c f
Interactive Question 11

1) On this intraday chart, what

pattern is completed in the circled
area?
2) At what price is this pattern
completed?
3) If you buy at the completion of this
pattern what is your stop? What is a A
potential target?
4) Based on the risk/reward on (3)
above would you buy on the
completion of this pattern at A?
Interactive Practice
Answers
Interactive Answer 1- Match the patterns on the left with the number of
candle lines on the right

a) Hammer - 1
b) Shooting star - 1
c) High wave candle - 1 1) one candle line
d) Hanging man - 1
2) two candle lines
e) Dark cloud cover - 2
f) Piercing pattern - 2 3) three candle lines
g) Bearish engulfing pattern - 2
h) Bullish engulfing pattern - 2 4) four or more candle lines
i) Tweezers top - 2
j) Tweezers bottom – 2
k) Harami - 2
l) Evening star - 3
m) Morning star – 3
n) Falling window -2
o) Rising window -2
Interactive Answer 2
2
LIBERTY FIN
15.00
14.95

3 14.90
14.85
14.80
14.75
14.70
14.65
14.60
14.55
14.50
14.45
14.40
14.35
14.30
1 14.25
14.20
14.15
14.10
14.05
14.00
13.95
13.90
13.85
13.80
13.75
13.70
1) Neither was a bearish doji since both 13.65
made new highs for the move. It was only 13.60
13.55
after doji 2 that we got bearish confirmation 13.50
since that close was under the doji’s close. 13.45
13.40
2) A bearish engulfing pattern is completed 13.35
13.30
at 3 13.25
13.20
13.15
13.10
13.05
13.00
20 21 24 26 27 28 31 2 3 4 7 8 9 10 11 14 15 16 17 18 22 23 24 25 28 29 30 31
2002
Interactive Answer 3
FED DEPT STRS 44.5

44.0

1) towards resistance
(at dashed line) 43.5

2) real bodies shrinking 43.0

3) bearish shadows 42.5

42.0

41.5

41.0

40.5

40.0

39.5

39.0

38.5

4 11 18 25 1 8 15 22 29 6 13 20 28 3
March April May June
Interactive Answer 4

Shooting
star 1) A doji and shooting star
Doji
2) Although there was a doji and
shooting star, each made a new
high close for the move. As such we
wouldn’t recommend selling short.
This shows the importance of
looking at the overall technical
X
picture
3) Based on (2) above, we need a
lower close to confirm the bearish
implications of the doji and
shooting star. This came at line X.
 Interactive Answer 5

1) A piercing pattern
2) Make a blended candle of this pattern – see below

Blended candle real body

= open of the first
session, close of the last
session.
Blended candle shadows
= highest high and lowest
close of all sessions
Interactive Answer 6
AMER EAGLE OUTF

3 Resistance area 27.0

2 26.5

26.0

25.5

1
25.0

24.5

24.0

23.5

1) Only the second one was a classic example of the bearish engulfing pattern because that 23.0
came after a rally while the pattern at 1 came in a box range as shown by the horizontal
lines.
22.5
2) Based on the above, 2 was a more likely top reversal.
3) The highest high of the pattern is resistance based on a close (as shown by dashed line) 22.0

4) This not a bullish engulfing pattern at 3. While it is a white candle wrapping a black
8 15
candle, 22 trend is wrong.
the preceding 29 A bullish engulfing
6 13
pattern come 20
after a downtrend 27
May
Interactive Answer 7

Falling
window Rising
window

Falling
window Broke
falling
windows’
resistance
levels
Interactive Answer 8 1) The rising windows are shown at arrows 1 to 3
2) We would look for the bottom of rising windows
1, 2 and 3 to be potential support levels
3) Line X is a hammer
A 4) Potential resistance area at the falling resistance
line that connect the highs from A and B
5) Buying the hammer’s close would not be a good
trade based on the risk/reward as shown below

1
B

reward

3
risk
x
hammer
Interactive Answer 9
1) A bullish engulfing pattern

2) This white candle wrapped around four

black candles and confirmed a support
area set a few weeks before the bullish
engulfing pattern

3) The reason for support near $23 was

due to the rising window at the arrow.

A
Interactive Answer 10

Rising
2) Doji window
confirming
support at 3) hammer 4) Piercing
1) Bullish bullish pattern
engulfing
engulfing
pattern
pattern
Interactive Answer 11

1) Bullish engulfing pattern (since

this is an intraday chart, even if the doji
close and open are the same it is still
viewed as an engulfing pattern)
2) The bullish engulfing pattern is
completed at 34.90
A
3) The stop is under the lows of the
bullish engulfing pattern near 34.60.
A potential target could be
resistance set by the doji which near
35.05.
4) Based on (3) above this isn’t an
attractive trading opportunity since
the risk is 30 cents and the reward
15 cents.