8 Best Books on Candlestick Patterns

You probably came here after hearing or reading about candlestick patterns, and now you want to take your knowledge to the next level.

If so, you’ve landed in the perfect spot. We’ve curated a select list of eight essential books offering deep insights and practical strategies on all things related to “Candlestick Patterns.” From in-depth coverage of candlestick formations to interviews with seasoned traders and a concentration on trading psychology to sidestep frequent pitfalls, these books will equip you with the skills to adeptly incorporate candlestick charting into your trading approach.

And for those who are just starting out and need a little extra guidance, we’ve even got a fully updated guide that breaks it down in the simplest terms possible – “Candlestick Patterns: The Complete Guide”. There is no shame in starting at the beginning! 

Also, while you are reading, we suggest always putting your new knowledge to the test. If you have a Tradingview premium account, try it there; if you do not, use Morpher. Why?

In the Tradingview free version, you can only save 2 templates, can only have 3 indicators and do not have after-hours / pre-market stock data. Morpher gives you unlimited data, unlimited layouts and unlimited indicator combos on one chart. On top of that, Morpher gives you candlesticks for markets you cannot find anywhere else, like luxury watches, sneakers, NFTs, and many more.

Not only do traders use Morpher for the enhanced capabilities for candlestick pattern trading, but also for the platforms simplicity and unique features. With benefits such as 24/7 trading, 10x leverage, infinite liquidity, or shorting any market, Morpher outshines traditional trading platforms on nearly every front. We actually recommend trading on Morpher when trying your new-found knowledge from the candlestick books. You will not find another platform with so many unique markets to trade.

And the sign-up process? Easier than anywhere else! Only 2 minutes and you can start trading; no KYC is required. Try it on Morpher right now!

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East

Link to the book: https://a.co/d/3dLO0SZ

If you’re a market technician and you haven’t heard of Japanese candlestick charts, you might want to crawl out from under that rock you’ve been living under. Steve Nison’s “Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East” is a must-read for anyone serious about improving their market analysis.

Nison is widely regarded as the man who brought Japanese candlestick charts to the Western world, and his book is the bible on the subject. Nison’s easy-to-understand language will help you grasp the basics and cover everything you need to know. Hundreds of examples show how candlestick charting techniques can be applied to almost any market. 

The best part of this book is that it is a true trove of knowledge. Not only does it give you a great amount of real-life candlestick trading scenarios, but also the historical context and facts you will not find anywhere else. Here is an example from the book on the morning and evening star context. 

Beyond Candlesticks: New Japanese Charting Techniques Revealed

Link to the book: https://a.co/d/5Upti7K

If you thought Steve Nison’s first book on Japanese candlestick charting was impressive, wait until you get your hands on “Beyond Candlesticks: New Japanese Charting Techniques Revealed.” The man who brought Japanese candlestick charting to the West is back with a quartet of powerful Japanese techniques never before published or used in the West. And let’s just say they pack a serious punch.

In “Beyond Candlesticks,” Nison provides step-by-step instructions, detailed charts and graphs, and clear-cut guidance on how to incorporate these new techniques into your existing trading strategies. Whether you’re a day trader or a long-term investor, whether you trade futures, commodities, or equities, this book is a must-read.

What’s really impressive about Nison’s work is his ability to take complex concepts and break them down into easy-to-understand language. As one reviewer put it, “reading it was a pleasure.” And when you consider the critical praise Nison’s first book received, it’s clear that “Beyond Candlesticks” is destined to become another classic reference on the subject of technical analysis.

The significant part about this book is that you truly go into depth and discuss different scenarios. In candlestick patterns, it is easy to mistake the pattern for something it is not; thus, you often trade on false signals. For that reason, Nison provides impressive examples and explanations of different scenarios and how to interpret them correctly. For example, the picture below is an excerpt from the book that shows two variations of the dark cloud pattern. 

The Candlestick Course

Link to the book: https://a.co/d/6n8jE6f

This is the last book we recommend from the “Father of Candlesticks” called “The Candlestick Course.” Let us put it this way: if you manage to get through all three books of Nison, you can almost skip the rest of this list as you’ll be more than ready to go and try out your knowledge. 

His books set themselves apart because they focus on practical applications, especially this one. Nison doesn’t just teach you about candlestick charting – he shows you how to use it in today’s trading environment to gain a noticeable edge over other investors.

With Nison as your guide, you’ll understand this investing technique completely. So, if you’re ready to take your candlestick charting skills to the next level, reading this book is a must for you.

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications

Link to the book: https://a.co/d/0db2Krm

John J. Murphy has updated his bestseller, Technical Analysis of the Futures Markets, to cover all financial markets. This new edition boasts an impressive array of technical tools and indicators, including the latest developments in computer technology and the ever-popular candlestick charting.

But who is John J. Murphy, you ask? He’s a prominent figure in the field of technical analysis, having already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets. And now, with the second edition of his book, he’s bringing his expertise to investors interested in analyzing and tracking market behaviour in today’s financial world.

With a special emphasis on futures markets, readers will gain a thorough overview of the field of technical analysis, from understanding charts to interpreting indicators. And with state-of-the-art examples and figures, Murphy makes sure that even the most complex concepts are accessible to all.

The most important part of the book for you is probably Chapter 12, where Murphy dives into Candlestick Patterns. He quickly goes over the basis and then starts giving you amazing advice on how to use candlestick patterns effectively or combine them with other indicators. Here is a glimpse from the book where he provides you with strategies only known to industry professionals:

“A revolutionary concept developed by Greg Morris in 1991, called candle pattern filtering, provides a simple method to improve the overall reliability of candle patterns. While the short-term trend of the market must be identified before a candle pattern can exist, the determination of overbought and oversold markets using traditional technical analysis will enhance a candle pattern’s predictive ability. Concurrently, this technique helps eliminate bad or premature candle patterns.”

High Profit Candlestick Patterns

Link to the book: https://a.co/d/fHuJYRo

Looking for High Profits? 🙂 Then you might want to pick up a copy of “High Profit Candlestick Patterns” by Stephen Bigalow. Bigalow breaks down the most effective techniques for using candlestick patterns to make informed investment decisions in this comprehensive guide.

Not only does Bigalow provide clear explanations of how to read candlestick charts, he also offers tips on how to incorporate money management techniques and stop loss procedures into your trading strategy. By doing so, you can eliminate emotional decision-making and make more calculated moves based on true investor sentiment.

With nearly 20 years of investment experience, Bigalow is a seasoned pro who knows how to spot the best patterns in the exciting world of charts. 

Bigalow’s book is undoubtedly a more advanced book on candlestick patterns, filled with advice from the trading floor: 

“Traders must survive before they can thrive. A major challenge for new traders is simply lasting long enough in the markets to learn the ropes. Those who do survive the early years eventually move from trading with emotion to trading with technique and discipline. As they gain experience, their focus shifts from that of mere survival to risk management and increasing profitability.”

Moreover, his charts and strategies provide more in-depth coverage and use of other technical indicators than other books, in our opinion. 

Market Wizards: Interviews with Top Traders

Link to the book: https://a.co/d/fmLS1VO

Ever wonder how the world’s top traders manage to rake in millions upon millions of dollars in the financial markets? Is it all just luck, or do they possess some secret, mystical knowledge? In his best-selling book “Market Wizards: Interviews with Top Traders,” Jack D. Schwager interviews some of the most successful traders of all time to uncover the secrets behind their unprecedented success.

From Bruce Kovner to Paul Tudor Jones to Marty Schwartz, Schwager delves deep into the minds of these superstar money makers to reveal the formula that propelled them to the top: a solid methodology paired with the right mental attitude.

Through Schwager’s expert storytelling, readers get an inside look at some of the most sensational trading coups of all time, including the trader who turned $30,000 into $80 million and the T-bond futures trader who made a mind-boggling $2 billion in a single day. As Martin W. Zweig, Ph.D., Editor of The Zweig Forecast, puts it: “Market Wizards is one of the most fascinating books ever written about Wall Street.”

In our humble opinion, every trader should read the book as it is filled with great advice. It makes you understand what the big traders that have made it prioritise and what they focus on. Surely, there are also many amusing quotes. Here is our favourite: 

“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”

Ed Sekota

Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude

Link to the book: https://a.co/d/0XYSaSm

Douglas, a renowned trading psychology expert, helps traders overcome ingrained mental habits that are costing them money and uncover the underlying reasons for their lack of consistency. By taking on the myths of the market and exposing them one by one, Douglas teaches traders to look beyond random outcomes and understand the true realities of risk. He helps them become comfortable with the probabilities of market movement that govern all market speculation. With “Trading in the Zone,” Douglas provides traders with a roadmap to success by emphasizing the importance of discipline, mindset, and emotional control. 

Some say that the book has information that is not always scientifically proven, but in the end, the book is strongly based on his experience, which is good in our opinion. Moreover, the book is easy to read, and he outlines that in assessing the landscape of trading, it’s imperative to consider the psychological factors that impact decision-making. Douglas posits five “fundamental truths” to cultivate a disciplined trading mindset:

• Anything Can Happen: Markets are inherently volatile and unpredictable. The range of possible outcomes is extensive, and no model can fully account for all variables.
• No Need for Certainty: Contrary to what some might assume, a trader doesn’t need to predict specific market events to profit. Rather, a disciplined approach to assessing probabilities suffices.
• Random Distribution: The sequence of winning and losing trades follows a random distribution. Past outcomes should not be viewed as indicators of future performance.
• Significance of Edge: An edge in trading doesn’t guarantee success; it only increases the probability of a profitable trade over a losing one. It’s crucial to understand that an edge is statistical in nature and is not a forecast.
• Uniqueness of Market Instances: Each market situation is a unique confluence of various factors. Traders must approach each instance independently, without bias from previous experiences.

Having read the book ourselves, it might not be the holy grail, but it surely will provide you with a different angle on how to think about the market.

Here is a review we could really resonate with:

“rest in peace mark! you are an absolute legend and left behind an amazing legacy in the form of your books! i cant put into words how much you have helped me better my trading and even transforming my life, i am ever so grateful to you mark! may your soul be blessed eternally.”

Candlestick Charting For Dummies 

Link to the book: https://a.co/d/bGQNUNv

And finally, a type of book that cannot be missed in any guide, …for Dummies. If you did not understand anything from the books above, this book is for you. 

Russell Rhoads, a renowned financial expert, has put together a comprehensive guide to help investors understand candlestick charts. Candlestick Charting For Dummies is the perfect resource for beginners. The book covers everything from basic investing terminology to the latest investing technology, including cryptocurrency. With easy-to-understand examples and real-life scenarios, this guide is an excellent way to build a foundation of investing knowledge and lingo. So, by the end of this book, you will have a versatile toolkit for trading candlesticks!

Learn to Trade Candlestick Patterns Like a Pro

While the books above on candlestick patterns often offer valuable insights, they fall short by relying on dated charts and indicators. As you can see, some of these books still have charts that use old black and white candles.

However, we’ve got something that brings you the best of both worlds—time-tested wisdom and up-to-date strategies. Our Complete Guide on Candlestick Patterns is probably the best resource you will find on the internet right now. We condensed the most important insights from the books and our experience into the guide. On top of that, we also provide you with strategies for today’s exciting markets—cryptocurrencies, forex, commodities, luxury watches, rare sneakers, and even NFT collections.

Conclusion

In conclusion, after reading through these eight books on candlestick patterns, we hope you have gained a deeper understanding of this popular trading technique. From learning the basics of candlestick charts and their patterns to developing a winning trading strategy, these books provide a wealth of knowledge and practical advice. It’s important to remember that candlestick charting is just one tool in a trader’s toolbox, and success in the markets also requires discipline, risk management, and a solid understanding of market fundamentals. We hope these books have expanded your knowledge of candlestick charting and given you valuable insights into trading psychology and the experiences of successful traders. If you’re interested in more books on investing, you should take a peek at the best investing books or stock market books for beginners. 

Disclaimer: All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. This post does not constitute investment advice.