12
min read

Pre Class Self Study

Technical Analysis - Candlestick Pattern

 

Instructions: Answer in your own words. Keep definitions short (2–3 sentences) and include one example for each when asked. Bring your notes to class.

A0) Beginner Track — Simple Definitions & Checkboxes (use if you've never opened a chart)

Keep it ultra short. Aim for 7 words or fewer per definition.

1) One‑sentence definitions (lookup & write your own)

Your job is to look this up. Write your own 7–12 word definition for each term based on at least two sources. Do not copy/paste.

  • Chart — __________________ (hint: search "what is a price chart")

  • Candlestick — __________________ (hint: "candlestick chart open high low close")

  • Time frame — __________________ (hint: "chart time frame definition trading")

  • Trend — __________________ (hint: "uptrend downtrend market structure")

  • Volume — __________________ (hint: "trading volume definition futures")

  • Support — __________________ (hint: "support vs resistance explained")

  • Resistance — __________________ (hint: "support vs resistance explained")

  • Index — __________________ (hint: "what is a stock index simple")

  • Futures — __________________ (hint: "what is a futures contract explained")

  • Forex — __________________ (hint: "what is forex trading basic")

  • Tick — __________________ (hint: "tick size tick value futures definition")

  • Long — __________________ (hint: "long position definition trading")

  • Short — __________________ (hint: "short selling short position futures definition")

After each definition, write the two sources you used (site + URL) in Section M.

2) Match the word to the everyday idea (write the letter) (write the letter)

A. Floor B. Ceiling C. Direction arrow D. Crowd size E. Swapping money F. Agreement for later G. Mini S&P 500 H. Time length

  1. Support = __ 2) Resistance = __ 3) Trend = __ 4) Volume = __

  2. Forex = __ 6) Futures = __ 7) ES = __ 8) Time frame = __

3) Yes/No (circle one)

  • A line chart shows highs and lows. Yes / No

  • Volume means “how many were traded.” Yes / No

  • An index tracks a group of stocks. Yes / No

  • A tick is the smallest price move. Yes / No

  • In futures, shorting is as easy as going long. Yes / No

  • Technical analysis uses price/volume pictures. Yes / No

  • Day traders mainly rely on fundamentals, not charts. Yes / No

  • In one chart, each candlestick uses the same time length. Yes / No

4) Our three simple ideas (no formulas)

  • Trend = direction. Today mostly Up / Down / Sideways? (circle one)

  • Participation (Volume) = market activity. Quiet / Normal / Busy? (circle one)

  • Levels (Support/Resistance) = important prices. Write two examples you might mark:

    1. __________________ 2) __________________

  1. What is a futures contract in trading? Include the ideas of standardization, expiration, and margin/leverage.

  2. What is Forex (FX) trading? Explain what a currency pair is and what the base and quote currencies represent.

  3. What is the ES future (symbol /ES) and what index does it track? State its contract multiplier and typical tick size.

  4. What is a candlestick? Define open, high, low, close, body, and wick/shadow.

  5. What is a time frame on a chart? Give two examples (e.g., 5‑minute, daily) and what each might be used for.

  6. Why do many traders prefer candlestick charts instead of line charts? Give two practical reasons.

  7. What is a price chart? List two common chart types other than candlesticks.

  8. In futures, what is a tick? Give the minimum price fluctuation and how to convert it to $ value for a contract.

  9. In forex, what is a pip (and a pipette)? Give the typical size for EUR/USD and USD/JPY.

  10. What are indices (plural of index)? Give two examples from different countries/regions.

  11. What is a long entry? Describe when and why you might take one.

  12. What is a short entry? Describe when and why you might take one.

B) Fundamentals vs. Technicals (concept check)

  1. Define fundamental analysis in one or two sentences and list three examples of fundamental drivers.

  2. Define technical analysis in one or two sentences and list three tools or concepts used in TA.

  3. In your own words, explain why day traders in Forex or Futures often rely more on technical analysis than on fundamentals. Give at least three reasons focused on intraday trading.

C) ES Futures Numeracy (show your work)

  1. The ES multiplier is $50 × index price. If ES is trading at 5,000.00, what is the notional value of one contract?

  2. ES tick size is 0.25 index points. What is the $ value per tick and per 1.00 point move for one ES contract?

  3. For Micro E‑mini ES (/MES) with a $5 multiplier, what is the tick value and the $ value of a 1.00‑point move?

  4. If you are long 2 ES contracts and price moves from 4,998.75 to 5,001.25, what is your P&L in $? (Assume no fees.)

D) Forex Pip Math (show your work)

  1. On EUR/USD, 1 pip is 0.0001. For a standard lot (100,000 units), approximately how much is 1 pip worth in USD? What about a micro lot (1,000 units)?

  2. On USD/JPY, 1 pip is 0.01. For a standard lot, approximately how much is 1 pip worth in JPY terms? (State any assumptions you make.)

E) Chart‑Reading & Time Frames (applied)

  1. Sketch (or describe) a bullish rejection wick candlestick and a bearish rejection wick. What do these wicks suggest about intraday order flow?

  2. Choose two time frames (e.g., 15‑minute and daily). Explain how you would use the higher time frame for bias and the lower time frame for entries.

  3. Give one situation where a line chart might be useful and one where a candlestick chart is clearly superior.

  4. Identify one potential support and one resistance concept and explain how you might plan a long or short around them (include stop‑loss and target ideas).

F) Quick True/False (justify in 1 sentence)

  1. You must own an asset before you can short it in futures. (T/F)

  2. Candlestick charts show more intrabar information than line charts. (T/F)

  3. Fundamental data releases happen at scheduled times; most intraday trading occurs between releases. (T/F)

  4. In ES, a move of 1.00 point equals 4 ticks. (T/F)

  5. Forex always trades 24/7 with no weekend breaks. (T/F)

G) Reflection (1–3 sentences each)

  1. Which two concepts above were new to you, and how did you learn them?

  2. What is your current plan for risk management (stop placement, position sizing) when trading intraday?

Submission checklist:

  • Answers are in your own words;

  • Calculations are shown;

  • Examples provided where requested;

  • Bring to class (digital or printed).

H) Trend Basics (aligned with our in‑house trend model)

Goal: Understand what we mean by “trend” without learning our proprietary math.

  1. Define an uptrend and a downtrend using market structure (HH/HL vs. LH/LL). Sketch or describe an example of each.

  2. Describe two objective ways to confirm trend direction (e.g., moving‑average slope/stack, trendline + breakout). Give pros/cons of each.

  3. What is trend strength and how could a trader gauge it (e.g., impulse vs. pullback size, higher‑TF alignment, simple volatility measures)?

  4. Explain the difference between a pullback and a reversal. List two clues that a pullback may be turning into a reversal.

  5. Multi‑timeframe: If daily is up, 15‑min is sideways, and 5‑min turns up, what is your bias and how would you time entries?

I) Volume Participation (aligned with our participation/volume model)

Goal: Recognize when participation is expanding without seeing our formula.

  1. Define volume in futures vs. tick volume in spot FX. Why is futures volume often used as a proxy for FX participation?

  2. What is Relative Volume (RVOL) and how can a volume spike (or volume dry‑up) affect breakout quality?

  3. Explain VWAP in one sentence and how traders use it intraday (e.g., mean reversion vs. trend confirmation).

  4. What is Volume Profile? Define POC, Value Area High (VAH), and Value Area Low (VAL) at a high level.

  5. Given a consolidation under resistance, describe what volume behavior you would like to see for a high‑quality breakout.

J) Support & Resistance Foundations (aligned with our S/R model)

Goal: Identify actionable levels and how price behaves around them.

  1. Define support and resistance using swing highs/lows. Explain role‑reversal (resistance becomes support and vice‑versa).

  2. List three types of levels traders watch intraday (e.g., prior day high/low, opening range, round numbers, pivot points, session VWAP).

  3. Describe the concept of confluence (multiple signals/levels lining up). Why does it matter for probability and risk?

  4. Breakout vs. false break: give two tells for each and how you would manage entry, stop, and target.

K) Putting It Together (trend + volume + S/R)

Goal: Practice the logic our signals are built on—without learning the signal itself.

  1. Scenario (Trending Day): Price opens above prior day high, pulls back to VWAP + prior high confluence, and RVOL > 1.5. Outline a long plan (entry trigger, invalidation, target).

  2. Scenario (Range Day): Price oscillates between VAH and VAL with falling RVOL. Outline a fade plan and a separate breakout plan if RVOL expands.

  3. Checklist: Write a 5‑point checklist you would run before taking an entry that combines trend, participation, and level.

L) What You Need to Know (and what you don’t)

  • You do not need the proprietary equations behind our signals.

  • You do need to understand the ideas the signals represent: trend direction/strength, participation (volume), and key levels.

  • In class, we will reference these concepts by name; bring this sheet and your answers so you can map our call‑outs to the concepts above.

M) Research‑Only Rules + Source Log (no spoon‑feeding)

Goal: You look it up. We won’t give definitions.

  • Use 2+ independent sources for each item you didn’t already know.

  • Prefer primary/authoritative sites when possible (e.g., CME Group, Federal Reserve, BIS, exchange rulebooks). General sites (Investopedia, broker academies) are OK for basics.

  • No AI text; no copy/paste. Paraphrase in your words.

  • Keep definitions 7–12 words. Add one example when asked.

  • Cite sources in the log: Site Title — URL. If a paywall blocks you, pick another source.

Source Log (add rows as needed):

Q# Term / Question Source 1 (title + URL) Source 2 (title + URL)
1 Chart    
1 Candlestick    
1 Time frame    
1 Trend    
1 Volume    
1 Support    
1 Resistance    
1 Index    
1 Futures    
1 Forex    
1 Tick    
1 Long    
1 Short    
3 ES futures (multiplier, tick)    
8 Futures tick to $ value    
9 Pip / pipette sizes    
21 JPY pip value    

N) Scavenger Hunt (find it; don’t guess)

  1. ES contract specs: Find the contract multiplier and tick size for /ES and /MES on an official exchange page. Record both in Section C and cite the page in Section M.

  2. Forex pip sizes: Find the pip definition for EUR/USD and USD/JPY from a broker’s or regulator’s education page. Cite source.

  3. Session hours: Find the regular trading hours (Eastern Time) for /ES. Cite source.

  4. Economic releases: Who publishes Non‑Farm Payrolls (NFP) and at what time (ET)? Cite source.

  5. Index basics: What companies does the S&P 500 represent (in one sentence)? Cite an index provider or official page.

O) Minimal Platform Task (self‑guided)

  1. Open any free charting platform. Load S&P 500 (symbol of your choice). Switch between line and candlestick charts. Take one screenshot showing both (side‑by‑side or before/after). Label: time frame used and one observed support and resistance.

  2. On the same chart, add VWAP if available. Mark where price is above/below VWAP and write one short sentence on what that might imply (no right/wrong—justify).

Submit screenshots with your sheet. If the platform is confusing, look up “how to switch to candlesticks on [platform name]” and cite the help page.

P) Grading Rubric (fast)

  • Definitions complete & within 12 words (20%)

  • Math shown correctly (20%)

  • Source log with 2+ credible sources per lookup (25%)

  • Scavenger Hunt items located & cited (20%)

  • Screenshots labeled (time frame, levels, VWAP) (15%)

Penalty: Missing sources or copy/paste language = –50% on that item.

Q) Deep‑Dive Research Prompts (No spoon‑feeding — show evidence)

Deliverables for each prompt:

  • Definition (your own words, 1–2 sentences)

  • One authoritative source (exchange, regulator, index provider, or textbook) + one secondary source (broker academy, Investopedia, etc.)

  • Numeric example with your math shown (where applicable)

  • One screenshot from an official/credible page or a chart you annotated

Mark each deliverable with these tags: [DEF] [SRC‑A] [SRC‑B] [MATH] [SS]

Q1) Futures (contract basics)

A) [DEF] Define a futures contract. Include standardization, expiration, and daily mark‑to‑market.
B) [SRC‑A/B] Find the official product spec page for any futures contract of your choice (e.g., CME Group). List: exchange, product code, tick size, multiplier, settlement (cash vs physical).
C) [MATH] Using the spec, compute notional value and $ per tick at a realistic price.
D) [DEF] Contrast futures vs forwards (at least two differences).
E) [DEF] Explain initial vs maintenance margin in one sentence each.

Q2) Forex (FX market)

A) [DEF] Define Forex (spot). Clarify base vs quote currency with one example (EUR/USD).
B) [DEF] Define pip and pipette.
C) [MATH] Compute pip value for EUR/USD and USD/JPY for a standard lot; show the formula and plug in a price you observe.
D) [DEF] Spot FX vs FX futures: list two structural differences (exchange/clearing, hours, volume data).
E) [DEF] What is rollover/swap in spot FX?

Q3) ES Futures (/ES) — what it represents

A) [DEF] What does /ES track? Name the index provider.
B) [SRC‑A] From the exchange spec, list multiplier, tick size, tick $ value, trading hours (ET), settlement, and contract months. Include the page URL.
C) [MATH] If ES = 5,000.00, compute notional and $P&L for moves of +0.25, +1.00, and +10.00 points per 1 contract.
D) [DEF] What is /MES and how does it differ from /ES?
E) [DEF] Briefly describe price limit rules (limit up/down) at a high level.

Q4) Candlesticks (OHLC)

A) [DEF] Define open, high, low, close, body, wicks/shadows.
B) [SS] Draw or screenshot two candlesticks you find: one with a long upper wick, one with a long lower wick. Label what each might imply about rejection.
C) [MATH] Given OHLC = (Open 100, High 104, Low 98, Close 99), state whether the bar is up/down and the range in points and %.
D) [DEF] Difference between candlestick and line charts in one sentence.

Q5) Time Frames

A) [DEF] Define time frame on a chart.
B) [SS] On any platform, capture the same symbol in 5‑min, 1‑hour, and daily. Write one sentence on what each view helps you see.
C) [DEF] What is multi‑time‑frame analysis (HTF vs LTF)?

Q6) Why Candles vs Line

A) [SS] Provide two screenshots of the same period: line and candlestick. Circle any wick information that is missing on the line chart.
B) [DEF] Give two reasons candles are preferred for trading decisions; give one case where a line chart is fine.

Q7) What is a Chart?

A) [DEF] Define a price chart.
B) [SS] Show three chart types (e.g., candlestick, bar, Heikin‑Ashi or Renko). One sentence on the key difference for each.

Q8) Tick (Futures)

A) [DEF] Define a tick in futures.
B) [MATH] Using /ES specs, compute $ per tick and $ per point.
C) [MATH] Repeat for any non‑equity future (e.g., CL, ZN, GC). Compare.

Q9) Pip (Forex)

A) [DEF] Define a pip and typical sizes for EUR/USD and USD/JPY.
B) [MATH] Show the pip value formula and compute values for standard, mini, and micro lots at a price you observe.

Q10) Indices

A) [DEF] Define a stock market index.
B) [SRC‑A] Find the methodology (cap‑weighted vs price‑weighted) for S&P 500 and Dow Jones Industrial Average; cite sources.
C) [DEF] Give two examples of indices outside the U.S. and who maintains them.

Q11) Long Entry

A) [DEF] Define a long entry.
B) [MATH] If your stop is 3 ES points away and you risk $200, what is your max contracts? Show the math.
C) [DEF] Define risk‑to‑reward (R:R) and give a target for 2R.

Q12) Short Entry

A) [DEF] Define a short entry (for futures; no borrow needed).
B) [MATH] Price falls 1.75 ES points from your short entry. What is P&L per contract? Show math.
C) [DEF] Name one risk specific to shorting equities that does not apply the same way to futures.

Q13) Fundamental Analysis

A) [DEF] Define fundamental analysis.
B) [SRC‑A] Identify the agency/organization that publishes CPI, NFP, and Fed rate decisions, and the usual release day/time (ET) for each.
C) [DEF] One sentence on how rates/inflation influence FX.

Q14) Technical Analysis

A) [DEF] Define technical analysis.
B) [DEF] Briefly define support/resistance, trend, momentum.
C) [SS] Mark one support and one resistance level on any chart and label why you chose them.

Q15) Why Day Traders Use TA Over Fundamentals (FX & Futures)

A) [DEF] Give three intraday reasons (timing, microstructure, scheduled data).
B) [SS] Pick one economic release day. Screenshot the price reaction and write two sentences on how you would trade the reaction using TA.

Q16) Bridge to Our Signals (high‑level only; no formulas)

A) Trend: Identify HH/HL or LH/LL on your chart; state your bias.
B) Participation: Estimate whether today’s volume is below/normal/above average; justify (e.g., simple relative volume vs recent days).
C) Levels: Mark one support and one resistance that matter today; explain why (prior day high/low, VWAP, round number, etc.).

Submission Pack (checklist)

  • All [DEF] [SRC‑A] [SRC‑B] [MATH] [SS] items present

  • URLs included; screenshots annotated; math legible

  • No copy/paste; your own words throughout

R) First‑Chart On‑Ramp (No Broker, No Account, No Screenshots)

Read this first if you’ve never opened a chart. You do not need a broker to complete this assignment. Use one of the free sites below and just paste the URL(s) you used into your answers.

Option A — TradingView (fastest)

  1. Go to: tradingview.com → click Chart (top). No login needed.

  2. Press / (slash) to open the symbol search.

  3. Type one of these and select the match:

    • CME_MINI:ES1! (E‑mini S&P 500 continuous)

    • CME_MINI:MES1! (Micro E‑mini S&P 500 continuous)

    • EURUSD (spot forex)

    • USDJPY (spot forex)

    • TVC:SPX (S&P 500 index)

  4. Change time frame: top left dropdown → pick 5m, 1h, 1D.

  5. Change chart type: top toolbar (icon that says Candles/Line) → switch between Candles and Line.

  6. (Optional) Add VWAP: Indicators → search “VWAP” → add.

  7. Copy the page URL from your browser. Paste this URL into your answers wherever the assignment asks for “evidence”.

Option B — Investing.com (no login)

  1. Go to: investing.com → search “S&P 500 Futures” (for ES) or “EUR/USD” (for forex).

  2. Click Full Featured Chart. Use the Candles/Line toggle and time frame buttons.

  3. Copy/paste the URL you used into your answers.

Option C — Yahoo Finance (indices)

  1. Go to finance.yahoo.com → search “^GSPC” (S&P 500 index).

  2. Click Full Screen chart → change Interval (time frame) and Chart Type (candlestick/line).

  3. Copy/paste the URL.

If UI labels move around: search “change chart type [site name]” in the site’s help. Paste the help page URL as a source.

Overrides (replaces screenshot requirements)

  • For any section that used to say [SS] screenshot, instead: paste the chart URL you used + write 2–3 sentences describing what you see (e.g., what candles show that lines hide; what changes between 5m vs 1D).

  • That’s it. No screenshots required.

Mini‑Glossary of symbol codes (for search boxes)

  • ES1! / MES1! = continuous ES / Micro ES futures on TradingView.

  • EURUSD / USDJPY = spot forex pairs.

  • TVC:SPX = S&P 500 index (no futures).

Important

  • Don’t open a broker account yet. This course only needs free web charts for now.

S) Zero‑Overwhelm Pre‑Class — Google‑Only Version (Use this one)

Purpose: absolute beginners; no charts, no accounts, no platforms. Just Google it and answer in plain English.

What to hand in for each item:

  • 1–2 simple sentences in your own words.

  • 1 everyday example (if it helps).

  • 1 source link (title + URL). That’s it.

The 12 Questions (copy into your doc and fill in)

  1. What is a futures contract? (What is agreed? When? Why use it?)

  2. What is Forex (FX)? (What is a currency pair? What does EUR/USD mean?)

  3. What is the ES future and what does it represent? (Say which index it tracks.)

  4. What is a candlestick? (What four prices does it show?)

  5. What is a time frame? (What does “5‑minute” or “daily” mean?)

  6. Why do traders use candlestick charts instead of line charts? (Give two simple reasons.)

  7. What is a price chart? (What is on the X‑axis and Y‑axis?)

  8. What is a tick in futures? (Smallest price step; give any example.)

  9. What is a pip in Forex? (How is it similar to/different from a tick?)

  10. What are indices? (What do S&P 500 or Dow represent?)

  11. What is a long entry? (When do you use it?)

  12. What is a short entry? (When do you use it?)

Bonus (2 items — answer briefly)

  1. Fundamental analysis vs Technical analysis: one short sentence each.

  2. Why many day traders use technicals more than fundamentals: list two short reasons (timing + intraday decisions).

Search tips (use or ignore)

  • futures contract definition; forex trading basic; ES future what is; candlestick OHLC; chart time frame; candlestick vs line chart; what is a price chart; futures tick size simple; forex pip explained; what is a stock index; long vs short trading; fundamental vs technical analysis.

Example formatting (students can copy)

Q1. What is a futures contract?
Answer: A standardized agreement to trade an asset at a set price on a future date. Often used to hedge or speculate.
Source: CME Group — https://www.cmegroup.com/ (or similar page title+URL)

Instructor note: Tell students to complete Section S only for the first class. Ignore other sections until later.

Feedback Form