THE POWER OF - pwforex.com power.pdf · THE POWER OF CANDLESTICKS APPLICATIONS An essential guide...

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Copyright by APSRI @ Mar 2006

Website http://www.make100kprofitaday.com

THE POWER OF

CANDLESTICKS APPLICATIONS

An essential guide to all trading professionals

for quick-profit enhancement

Syllabus provided by

Acute Precision & Studies Research Inc. (www.PWforex.com)

Written by DAR Wong

1



COVER NOTE

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This book was written on sole opinions and thoughts of the author.

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First Edition - Mar 2006

Second Edition – Oct 2006

Third Edition – Nov 2007

2



CONTENTS

Foreword ………………………………………………………………………………………… 3

Chapter 1: Introduction of Candlesticks Chart Reading ………………. 5

Reversal Patterns and Reversal Signs of Market

Chapter 2: What are Reversal Patterns? ………………………………………. 8

Chapter 3: Hammer and Hanging -Man …………………………………………..9

Chapter 4: Engulf Pattern ……………………………………………………………..12

Chapter 5: Dark Cloud Cover ………………………………………………………. 14

Chapter 6: Piercing Pattern …………………………………………………………. 16

Chapter 7: Stars (Reversal) Formations ……………………………….……. 18

Chapter 8: Harami (Pregnant Sign) ……………………………………………. 23

Chapter 9: Pincer (Double Top / Bottom) …………………………………… 25

Chapter 10: Three Black Crows ………………………………………………….. 27

Chapter 11: Three White Soldiers ………………………………………………..29

Chapter 12: Fighting Warriors ……………………………………………………...31

Chapter 13: Three Mountains (Triple Tops) ………………………………… 33

Chapter 14: Three River Beds (Triple Bottoms) …………………………. 35

Continual Patterns

Chapter 15: What are Continual Patterns? …………………………………. 37

Chapter 16: Window (Gap) ………………………………………………………….. 38

Chapter 17: Repelling Lines …………………………………………………………..40

Chapter 18: Summary ………………………………………………………………….. 42

Epilogue …………………………………………………………………………………………. 47

About the Author …………………………………………………………………………… 49

3



Foreword

For more than a decade, I have been involved in Financial Futures & FX

markets by servicing both the corporate customers as well as taking

positions for my own trading account.

During the late 90’s, which I traded as an individual trading local in

Singapore Exchange (known as SIMEX then), I had personally

achieved a record profit of USD99K in a single day trading. With a

mere initial trading margin of USD30K, I hit a total cash asset of more

than a million dollars in less than 5 years and semi-retired from year

2001. Of course, the first year of trading in 1996 was a tough period

for my trial and learning. In this book, I shall unfold to you my trading

formula and secret; you can also do it with the correct gifted aptitude.

To expedite the learning process, I made this book all into bullet

points text and emphasized only on all solid contents instead of

scholar wordings.

Always remember - Market trends are just repetitions of past history.

Focus your study on trends, indicators, waves and reversal patterns;

then combine them to conquer the market at the right timing.

Unfortunately, this may take years for the above skills mentioned to be

properly sharpened!

Nevertheless, to cut short on all the learning curve, I would only

impart to you the most important skills which had helped me made

USD99K in a day i.e. Candlesticks chart reading, Market tops and

bottoms and one final but most important secret which was revealed in

the Summary of this book.

“Winning is all about timing and precision. All other factors are just

preparations to your eventual SUCCESS!”

It is always very important to have good risk control management

when in trading. I have seen many traders in this market who came

and went by, including some BIG institutional BIG boys!

In short, market is not about just punting but rather by using the skills

and caution to survive long term. You’d got to find a way to become

the lead role instead of just getting a cameo appearance!

4



If you have already been trading in the market, this book might be the

best gift to you and you would comprehend easily on the skills that I

showed and mentioned herein. If you are a rookie, I promise the solid

contents will expedite your success if you bother to read through this

book a few times.

Successful trading is weighted heavily on the familiarization of

recognizing profitable price patterns. In my last 18 years of conversing

with other experienced traders, all agreed with me! I guarantee you

that if you read this above phrase again and again after every 3

months of consistent trading, you will continue to discover new

realization!

Finally, I would like extend my personal thanks to Sun Lim, who has

helped me to re-draft all the candlestick diagrams in this book. Just

like me, he is a passionate and experienced propriety trader for more

than 10 years of good trading records in this industry. If you are

delighted and impressed by the colors printed in this book, say thanks

to him for his effort. He work in this book may probably elevate your

interest in reading it for more than one time.

Cheers and happy trading!

Best Regards,

DAR Wong, Principal Consultant

http://www.PWforex.com

Acute Precision and Studies Research Inc

5



Chapter 1: Introduction of Candlesticks Chart Reading

a) The Origin

• Used by the Japanese as early as in 1700s to forecast soft

commodities market in Japan.

• Later applied in 1800s by the Japanese economists and

professionals onto Government indices and financial instrument.

• Perfect to be used in conjunction with the western knowledge

and theories. Good to predict fast moving market with high

accuracy e.g. spot currencies, soft commodities, stock indices etc

• Do not use on slow moving market or low liquidity instruments.

• Recommended to be used only from 30min, 60min chart and

above e.g. Day chart, weekly chart, monthly chart etc.

b) The Advantages and Strengths of Using Candlesticks

• Candlestick charts are flexible and easy to read.

• Proven for few hundred years by multiple trials and errors.

• Many keys to predict market reversals but easy to remember.

• Easy to be accessed and high accuracy when used together with

western methods.

• No limitations when apply to any financial instruments.

c) The Facts

Many traders might be familiar with Candlesticks skills but do not

know how to apply them effectively for making profits. The secret of

using it is to “spot” big market reversal by blending with wave trading

concepts. Such phenomena happen to all market instruments!

In broadest aspect, all market prices move in “Continual Patterns” or

“Reversal Patterns”. Trading in Continual Patterns usually takes mid to

long term for holding positions; whereas trading in Reversal Patterns

is perfect for day trading and can make profits easier and faster!

“One of the biggest and most potent ways to make monies in the financial

market is being able to spot the reversal pattern. This unique skill is just like

licking cream on the fingertips if anyone can posses the expertise of

Candlesticks reading.”

6



d) Important Daily Indications to Form a Candlestick

• The opening price

• The day high traded

•

The day low traded

• The closing price

In short, traders call these 4 readings as <open, hi, lo and close>.

A “White candlestick” is formed when the closing price is higher than

the opening price of a same instrument within the same day (intra-day)

- that means a bull market for the intra-day.

A “Black candlestick” is formed when the closing price is lower than

the opening price of the same instrument within the same day (intra-

day) – that means a bear market for the intra-day.

The white or black box of a candlestick formation is known as the

“Real body”; the upper line and lower line are known as “Shadows”.

Take note that in this whole book, we have used “green candle” to

denote the white and the “red candle” to denote black one.

Some of the illustrations as below:

Fig 1.11 Fig 1.12 Fig 1.13 Fig 1.14

7



Fig 1.15 Fig 1.16

8



Reversal Patterns and Reversal Signs of Market

Chapter 2: What are Reversal Patterns?

Definition

• A reversal pattern shows the imminent ending of a trend and may

turn for opposite direction in due course.

• The exhaustion may indicate a trend reversal or just a temporary

correction wave

• The goal of this book is to teach readers master the various

reversal signs and pre-empt market direction of following day.


Fig 2.11 Fig 2.12

Note:

Fig 2.11 shows a top reversal trend

Fig 2.12 shows a 2 way (deceptive) top reversal trend

9



Chapter 3: Hammer and Hanging-Man

Definition

• A hanging-man appears at the upper end of the trading range.

• A hammer appears at the bottom end of the trading range.

• The color of the real body is not important.

• The lower shadow should be at least twice as long as the candle

body.

• The upper shadow should be very short or no shadow at all.

• The longer the lower shadow signifies a sharper trend turning.


Fig 3.11 Fig 3.12 Fig 3.13

Note:

Fig 3.11 show the signs of hammer / hanging man regardless of body

color

Fig 3.12 shows hanging man forms at market top reversal

Fig 3.13 shows hammer forms at market bottom reversal

10



Fig 3.14 shows the hammer as reversal sign in Dow Jones Index

Fig 3.15 shows the hammer as reversal sign in Dow Jones Index

11



Fig 3.16 shows both hammer and hanging man as reversal signs in

S&P Index

12



Chapter 4: Engulf Pattern

Definition

• This pattern indicates immediate turning, even though it is a very

short termed reversal.

• Engulf Pattern comprises of 2 candlesticks. The 2nd one must

fully engulf the real body of the 1st one (covering the shadow of

1st candle is not necessary).

• The 2nd candle must be opposite color to the 1st candle.

• If the 2nd candle is long and coincides with a reduced trading

volume (or open interest), be prepared to make your first pile of

monies!!!


Fig 4.11 Fig 4.12

Note:

Fig 4.11 shows the Engulf Pattern at market top reversal

Fig 4.12 shows the Engulf Pattern at market bottom reversal

13



Fig 4.13 shows the Engulf Pattern as reversal sign in Bund Futures

Fig 4.14 shows the Engulf Pattern as reversal sign in EUR/USD spot market

14



Chapter 5: Dark Cloud Cover

Definition

• This pattern usually occurs after a series of up trends over many

days.

• After the bull runs for a short period, there might be a day when

the market opens at near low and travels to close at near high,

forming quite a substantiate real body.

• On the following day, if the market opens higher than previous

closing price but closes in the range of previous day real body,

this shows exhaustion of market.

• The pattern can be doubly assured if the dark cloud candle

coincides with a reduced trading volume (or open interest) for

intra-day.


Fig 5.11

15



Fig 5.12 shows the Dark Cloud Cover and E.P. as reversal sign in TW Index

Fig 5.13 shows Dark Cloud Cover and D.H. as reversal signs in Gold spot

market

16



Chapter 6: Piercing Pattern

Definition

• This pattern occurs as opposite to Dark Cloud Cover because it

appears along the downtrend of market, whilst preparing to

upturn.

• Piercing Pattern also includes the closing of white candle along or

below the neckline of previous black candle.

Some of the illustration as below:

Fig 6.11 Fig 6.12

17



Fig 6.13 shows the Piercing Pattern and other reversal signs in EUR/USD

spot market

Fig 6.14 shows Piercing Pattern with other reversal signs in NK225 Index

18



Chapter 7: Stars (Reversal) Formations

Introduction

Stars are very powerful reversal signals. The longer the shadows

mean the more powerful the reversal will come.

Stars recognition is unique to Candlesticks study. It signifies an

equal force of buying and selling interest, thus reaching an

imminent end of the current trend with diminishing interest

(usually comes with reduced trading volume).

The color of the stars is not important. The coincidence of a doji

star (very slim real body with long-legged shadows) with the

intersection of moving averages lines could mean the end of the

current trend.

Stars that appear together with trading gap (window) signify a

powerful coming reversal.

Some cases had shown a tri-star formation which indicated a

very strong market reversal sign.

There are 4 types of stars formation namely morning star,

evening star, doji star and shooting star.

a) Morning Star

• Indicate market upturning along exhausted downtrend.

• The appearance of a slim real bodied candle after a series of

downtrend candles.

• Significance of rising sun (upturn) for the market traders.


Fig 7.11 Fig 7.12

19



b) Evening Star

• Exact opposite of the Morning Star. Appears at the top range of

an uptrend.

•

Signifies fatigue bull and let it sleeps for a peaceful night.


Fig 7.13 Fig 7.14

c) Doji Star

• A Doji Star is a very slim-bodied candle which usually occurs at

the end of a top or bottom range.

•

It may appear as a “cross”. The longer the 2 shadows mean the

more powerful the coming reversal will be.

• It may be classified as a Doji Morning Star or Doji Evening Star,

depending on its location.


Fig 7.15

20



d) Shooting Star

• A Shooting Star occurs at the top of the market range.

• It has very slim real-bodied with very long (normally >3 times

the size of real body) upper shadow, but no lower shadow.

• The color of the real body is not important.

• The longer the upper shadow means the more powerful the

coming reversal will be.


Fig 7.16 Fig 7.17

e) Inverted Hammer

• An Inverted Hammer is exactly a shooting star occurring at the

bottom range of market (instead of being at the top).

• It is also a powerful reversal signal and carries all characteristics

of the Shooting Star.


Fig 7.18

21



Fig 7.19 shows morning star as reversal sign in US10Y Note Futures

Fig 7.20 shows inverted Hammer as reversal sign in NK225 Index

22



Fig 7.21 shows 2 Stars formation on 3 different dates (Dow Jones

Index)

Fig 7.22 shows Shooting Star as reversal sign in Gold spot market

23



Chapter 8: Harami (Pregnant Sign)

Definition

• Harami sign usually occurs at the end of the trading range.

• It literally means ‘pregnant’ from direct translation in Japanese

language.

• A candle with very slim real body within the real body size of

previous candle.

• The color of the Harami candle is not important.

• Harami sign may be interpret as a Star when the shadows are

long enough.


Fig 8.11 Fig 8.12 Fig 8.13

24



Fig 8.14 shows Harami as reversal sign on 2 different dates (EUR/USD

market)

Fig 8.15 shows Harami as reversal signs in S&P Index

25



Chapter 9: Pincer (Double Top / Bottom)

Definition

•

A pincer is formed when the extreme price range of 2 market

days are almost the same.

• It can occur at the top or bottom of market range.

• The colors of the 2 comparable candles are not important.

• A pincer can be classified as “pincer top” or “pincer bottom”.


Fig 9.11 Fig 9.12 Fig 9.13

26



Fig 9.14 shows Pincer as reversal sign in S&P Index

Fig 9.15 shows Pincer as reversal sign in GBP/USD spot market

27



Chapter 10: Three Black Crows

Definition

•

In Asia, black crow is disliked by people for being a cunning and

unlucky bird.

• This pattern can be very deceptive and always catch many

traders confused.

• For the consecutive 3 days, each day closing price is lower than

the previous one.

• The real bodies of the 3 black candles are very similar in size.

• This pattern may be a short correction after a bull run and

continue the uptrend;

• It can also be a sign of market being topish thus gathering new

selling force to head south.

• As corrective pattern, we depend on the 4th day to show clear

white candle in order to continue the uptrend.

• As down turning trend, it may show unsure sign on 4th day then

take few more days of jigsaws before finally plunging down.

• In fact, you can check other indicators to predict the 4th day

candle (white or black) because it could be a breakout formation.


Fig 10.11 Fig 10.12

28



Fig 10.13 shows the 4

th

down-day after the 3 Black Crows appeared in

GBP/USD spot market


th

up-day after the 3 Black Crows appeared in GBP/USD

spot market

29



Chapter 11: Three White Soldiers

Definition

• This pattern is exactly the opposite characteristics to ‘Three Black

Crows”.

• This pattern depends on the 4th day to tell you whether it is a

bull or bear market.

• Then again, check with other indicators to predict your view on

4th day candle.


Fig 11.11 Fig 11.12

30



Fig 11.13 shows 3 White Soldiers followed by 4

th

& 5

th

down-day in

10Y Jpn Govt Bonds Futures

Fig 11.14 shows the 3 White Soldier followed by the 4

th

up-day in Dow

Jones Index

31



Chapter 12: Fighting Warriors

Definition

•

This sign occurs when 2 candles charging at each other with

opposite colors along a moving trend.

• The necklines never cross each other.

• Both real bodies have good trading range.

• Fighting warrior is very accurate especially when the slow

stochastic lines cut each other.


Fig 12.11 Fig 12.12

32



Fig 12.13 shows Fighting Warriors as reversal sign in NK225 Index

Fig 12.14 shows Fighting Warriors as reversal sign in NK 225 Index

33



Chapter 13: Three Mountains (Triple Tops)

Definition

•

Three Mountains is a reversal pattern and appears on topish

market by forming a trend line of resistance.

• Buddha Top appears like a head with 2 necklines (known as Head

& Shoulder).

• Usually both trends mentioned above will follow by a 4th attempt

to break it upwards or if not, turn down upon failure.


Fig 13.11

Fig 13.12 (Head & Shoulder) Fig 13.13

34



Fig 13.14 shows the 3 Mt.Tops & H&S formations in Singapore Stock Index

Fig 13.14 shows the shoulder line formation as resistance in EUR/USD spot

market

35



Chapter 14: Three River Beds (Triple Bottoms)

Definition

•

This pattern is also known as Inverted Head & Shoulder. It is

exactly the opposite characteristics to the Three Mountains and

Buddha Top.

• Triple Bottom formation usually forms as very strong support line

to hold market price.


Fig 14.11

Fig 14.12

36



Fig 14.13 shows Triple Bottom as strong support line in NK 225 Index

37



Continual Patterns

Chapter 15: What are Continual Patterns?

Definition

• Continual patterns (formations) are the extension of current

trend to farther price magnitude.

• Such patterns give traders confidence to sit on long term position

in order to enhance profits.

•

Normally a continual formation of moving trend will show many

confusing signs within the trend itself in order to mislead traders

and abandon their good position.

• Whenever you are confused, check other indicators to confirm

your view.

• In a continual trend, it is necessary to protect your position with

a trailing or outright “stop loss” order.

38



Chapter 16: Window (Gap)

Definition

•

A window is a gap that occurs when the market trades at a day

low which is higher than the day high of the previous day; or vice

versa.

• A window occurs when the trend is in continuation of moving

higher (or lower).

• All windows need to be covered eventually; usually it will be

covered within 55 market trading days.

• Basically, we recognized 2 types of windows namely “Simple

Window” and “Triangle Window”.

• A “Simple Window” may show the beginning of the new moving

trend.

• A “Triangle Window” signifies a very strong breakaway trend in

motion.


Fig 16.11 Fig 16.12 Fig 16.13

39



Fig 16.14 shows the various gaps in NK225 Index

Fig 16.15 shows the price breakout (16

th

Nov) from triangle formation and

also covered the gap created on 26

th

Oct

40



Chapter 17: Repelling Lines

Definition

•

This pattern looks like the fighting warriors initially but has the

3rd consecutive candle continue in the original trend.

• In an uptrend market, the 3rd candle usually opens at day low

(above the previous market open price) and closes at higher

price to form a white candle.

• In a downtrend market, the 3rd candle usually opens at day high

(below the previous market open price) and closes at lower price

to form a black candle.


Fig 17.11 Fig 17.12

Note:


rd

(white) candle as Repelling Line in bullish

market


rd

(black) candle as Repelling Line in bearish

market

41



Fig 17.13 shows Repelling Line (15

th

Jun) as continual trend sign in

NK225 Index

Fig 17.14 shows Repelling Line (9

th

Oct) as continual trend sign in

NK225 Index

42



Chapter 18: Summary

After digesting the first 17 chapters of this book, readers would have

enough skills to forecast any market reversal. It may not be necessary

for traders to memorize the names of the candlestick signs; however,

it is definitely not difficult to remember each and every one of these

reversal patterns by hard!

In Futures and FX trading, carrying overnight positions requires

margin and regular monitoring of market movements. An easy way out

to make fast buck is to forecast market range by “spotting” reversal

sign on the day prior to that. This can be done on every market day out

of any financial instrument.

Generally speaking, the plain analysis of purely using candlestick signs

marks an accuracy of around 60%. However, it can be further

combined by using other indicator readings to elevate this rate.

From my experience, combining the analysis of candlesticks signs with

the “Moving averages” and “Slow stochastic” is formidable!

a) Exponential Moving averages (EMA) – Use 4, 9, 20 (EMA)

concurrently.

b) Slow stochastic – K% line computed by using 14 and 21 days

average period

For Exponential moving averages, this is one of the most on-time

indicator yet 90% traders overlook this because it seems too simple to

follow. By nature, most traders like to adopt difficult, complicated and

yet, time lagging indicator because they spent a bomb to pick it up

somewhere.

The three EMAs (4, 9 , 20 days) may not always converge but once

they do, and coincide at the end of today’s market close, this will give

rise to a high probability of forming new robustic trend over next 2-4

days!

Basically, out of the 3 EMA lines, when the 4-day EMA line cuts the 20-

day EMA average line, the trader must be aware of a very solid

imminent shootout trend. This is especially highly accurate when this

new trend matches the beginning of a new C wave count in a tri-wave

formation!

43



Slow stochastic is a wonderful indicator that comprises of K% line and

D% line. Whenever the 2 lines meet at the bottom overbought zone

(before actual intersection) and best if it coincides with a powerful

reversal sign of candlestick, you can bet the following day will be a full

real white candle with big range i.e. most probably open at day low

and close at the day high. That’s how I made USD99 sometime back on

a particular day in Nikkei 225 futures!

Likewise, if the lines K% and D% meet at the top oversold zone

(before actual intersection) and coincides with a convincing reversal

sign, then prepare to make your monies on following day by selling at

day open and buy back only at day close!

For above 2 cases, the initial shadow of the day candle will most

slightly be very short or NO shadow at all!

In any case, if the Slow stochastic reading is neutral i.e. 10% - 90%,

somewhere at the middle zone of the chart, then a reversal sign of the

current day might just signify a market turning on following day but

with a short real body i.e. small trading range!

One point that is worth mentioning is during a continual trend of a

market, if the ends of 2 stochastic lines are rather wide apart, then

market may do just a small real bodied candle on following day

(known as conditioned day). The purpose of such small candle

formation is for the market to condition a gradual turning over

immediate 1-3 days!

Through my years of trading experiences, you could safely rely on just

these 3 tools to make a good living i.e. Candlesticks signs, moving

averages and slow stochastic. Relying on other indicators will only

complicate and confuse the trader’s decision!

It is worth mentioning that there are some new charting softwares

nowadays that compute Slow stochastic with 3 parameters. In this

case, you may use (5, 5, 5) for FX markets and (14, 3, 3) for futures

markets! These should give best results in evaluating the market

strength together with candlestick reversal and EMA 4, 9, 20 days!

44



Another tip to help you roughly estimate the daily market range is

taking the average of previous 9 days range. Of course, when a solid

candlestick reversal sign coincides with a good turning intersection of

slow stochastic (at extreme zone) together when the Exponential

moving averages also converging together, that is the time when

market will defy all logic and extend an unbelievable and big intra-day

range!

By using such wise methods to trade the market, you will consistently

accumulate wealth daily because you know when to enter /exit fast

and of course, when also to go for a full market ride!

At the end of the week, access the weekly market chart and see if it is

a potential reversal sign for the following week. This process is known

as “Forecast of potential full market range on following week”!

For Futures trading, it is appropriate to read and access the

candlestick signs using underlying cash market price for better

accuracy! After evaluation, one way to estimate the entry /exit points

in its futures market is by always keeping track of the basis to the

underlying cash market price.

There have been traders who bough this book but said they knew

about what was mentioned here long time ago. My point is why they

had not spotted a market and made USD99K a day before like I did?

Remember that market moves with prices seen as the same in the

whole world and also at the same time; it looks visually the same to

everybody but perceived differently to every individual.

How to Spot a True Reversal Sign?

If you look closely into a continual trend, every time the market moved

in series of few days with same candle color, usually a reversal candle

would appear after the 3

rd

or 4

th

or 5

th

day. This type of reversal sign is

considered as deceptive reversal. Trader should take precaution that

the following day after such sign might reverse again and continue in

the original trend!

Conditioned day means a sideway trading day (usually small candle)

before the following day goes into a confirmed trend, regardless in

same or opposite direction. The reason market has conditioned day

45



before a real running trend is to deceive traders or shake out good

positions before the new trend resumes. Take note that if you look at a

bar-chart but try to search for such formation, you should see nothing

but just a series of strong trend moving in its direction!

Therefore, it is good to understand Candlestick charting techniques

and bear in mind of the trap of an intra-day reversal correction after 3

or 4 days of extension, before it resumes again in original trend later!

How to suffer less market swing?

Most new or ignorant traders tend to lose more monies than

experienced traders due to entry points. In simple word, if your first

entry is at bad level, the back-end stop-loss cushion will become easily

triggered or imbalance to your potential profits even if market runs in

your favor!

In order to minimize your potential loss and to enhance your potential

profits, I am going to disclose to you at this very moment the simple

but long-searched and self-discovered secret to higher winning rate of

profit trading!

First of all, the FX chart that you are using is very important. It must

be synchronized to your local time zone. Next, take the standard

market opening price at your local time 8.00 am as daily standard

routine. Then regardless you want to go long or go short, place a

potential entry away from the opening price usually at 20 - 30 pips

distance. This is known as shadow entry. Of course, you can do some

back-testing of the candle shadows among a period of time frame in

order to get this average shadow length.

When this entry is accompanied by a pre-planned stop loss, then you

may be just sitting in profits for most of the time when market hits

your entry order and u-turns again to run in your potential profits!

Exit level can be estimated by using the past 9 day range as covered

earlier in this chapter, counting from the current day high or day low!

In a continual trend regardless in wave 1, 3 or 5, traders should learn

to spot true reversal sign that usually comes only on the day between

9

– 21 days in a continual trend. This will greatly depend on the wave

extension mode to confirm its shoot-out length. After this reversal sign,

trader can expect a sharp reversal for at least 3-4 days of opposite

market direction. This type of correction can perform up to 30% or

46



even 50% retracement before the trend resumes backwards again!

However, the fast monies to be made over just these 3-4 short series

of reversal days can compensate others of working for months!

If you have very strong foundation of candlesticks reading skills and

stochastic analysis like me, all you need is to make sure is to be in the

market when the favorable trend comes on that particular day!

During my “Acute Power Trading” or “FX Mastery” courses, I trained

our trading associates to forecast and foresee the likelihood of

following day’s formation with a contingent strategy when the first

expectation fails!

Do not let GREED take over you!

Always enter the market with a pre-set stop loss order!

Trade smart - that is my winning formula. It can be yours too!

47



Epilogue

Frankly, trading looks complicated but it is not difficult though. You do

not need rocket science or an MBA to make good monies from these

markets. I have always traded based on the expected range of small or

big on current day, by reading the reversal sign of previous day with

the 2 indicators mentioned in Summary page. My daily profits range

from few hundred bucks to top record of USD99K plus. On certain days

that I really could not understand the market movement, I simply

stayed out for a golf game or dated my wife for a shopping spree.

Market opens on every weekday with or without you! There is no hurry

to make your monies there if there is no clear market sign! What’s

more important is to make consistent profits on every market entry; be

it just 10 days out of 22 working days. I shall take all your stakes if

you disbelieve me on this bet!

From tomorrow onwards, take the skills that you have just learned

from this book and start “spotting” the reversal signs. If you do like

what I have done, I guarantee you will accumulate enormous wealth

over next 3-5 years. If you are unsure somehow, just read through this

book again and again! Every time you re-read the Summary page may

let you see new light!

Focus on the skills that you have acquired and apply them respectively.

All you need to do is to put extreme power focus in the market daily;

this will only cost you minutes to few hours daily but a sure way to

make regular power income on long term basis.

Always remember my 3N-Rule:

a) Never think the market is wrong!

b) Never sit on a losing position!

c) Never trade if you are confused!

48



You are advised to restructure your trading strategy as follow:

1) Gauge entry from daily candle shadow

2) Plan your stop loss

3)

Estimate you potential exit

4) Avoid trading in swing day like series of doji or small body

candles

5) Learn to trade on breakout strategy and reach targeted wave

price from our “FX Mastery

TM

Trading” workshop.

After you strengthen this field, this should help you to make some

consistent profits from the market. What you need to acquire next is

the wave trading concepts and some intraday trading strategies for

quick-timing profits.

Our FX Mastery

TM

Trading module is always packed when we open the

course to traders because they know they get only the best by

enrolling into this high quality module for permanent awareness of

market profits!

Good luck.

>> P.S. You have not attended or registered for our workshop, you are

always welcome to subscribe our free Weekly Financial Snippets at

following link: http://www.pwforex.com/contactus.htm

49



About the Author

DAR Wong holds a professional qualification in NASD series 3 and 5.

He started his career in the financial industry since 1989, with Bank of

America Futures Inc. He experienced multiple roller coaster rides of

various world markets events like Dow Jones market crash (1989),

Soviet military coup (1991), Desert storm (1991), Bull run market

(1992-1995), Barings Bank collapse (1995), Asian currency turmoil

(1997), US-Iraq war (2002) etc.

His past employment record for a decade included many multi-national

companies like Bankers Trust, BZW Inc, Citigroup etc. After traded on

his own personal account from 1996 – 2001, he went into semi-

retirement. Since 2003, he acted as personal financial adviser to few

superb high-net-worth individuals in ASIA countries. Till date, he also

conducts coaching sessions and seminars for Singapore Exchange

(SGX) as well as to the enlarging group of retail traders.

He education and risk management in trading has been widely pursued

from many successful traders in China, (H.K. SAR), Indonesia, Malaysia,

Middles East (U.A.E.), Singapore, Vietnam.

In year 2006, he founded and formed Acute Precision & Studies

Research Inc. (APSRI), with the corporate mission of Create wealth

While Preserving Your Capital.

In today’s modern economy, knowledge and information are two

powerful tools to create unlimited wealth if anyone knows the simple

trick to use them. Education teaches Knowledge. Technology accesses

Information. In APSRI, DAR Wong teaches his trading associates how

to utilize these 2 tools to create unlimited wealth from the financial

markets!

Currently, besides functioning as hedge advisor and trader, DAR writes

as a weekly columnist for The Borneo Post and The Trader’s Journal

monthly publication.

“No one is too old to succeed. It is when you want to develop the

desire to do it!”

50



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