Course Hero Logo

1111 i i be moved to a lower risk trade one that

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 35 - 38 out of 411 pages.

,,1111i,Ibemovedtoa lower risk trade,onethatwould havetheupside potential aswas seenatthe beginningofthistradein midtolate January.Theappearanceofa Dojiatanimportantresistance level such as atrendline also has significance. Notice in Fig.2-14, the Cadence Design Systems Inc.chart,howa Doji, in the overbought, condition forms rightatatrendline.Themajor advantageofcandlestick signalsisthattheyindicate immediatelywhatthe investor sentimentisdoingatimportantlevels.
30High Profit Candlestick PattemsAnIndecisiveDOji,'Nhen thestochasllcs are wellinthe overboughtarea starting to cun down, will indicate,_thaI the maJolllyofthe trendisovergO)T"'"">c_~~~'~~.".../:~'~..,'..//'"f,6~.9~~'"--------...---------_...-.------..---------------_...--~..,,---~53811010\161IIIIlIIIIIAu'1,11,,111,"'1''"Ise"II'I',11111,Ililldot'll,11111111111111""11"I,11111111,1116'....,112Igr;!6Ot0;11~23\07132~~i01II18~IOQ15221..n..~..,19100'(lIJ11'1OCQ001OO!Fig. 2-15Hannonic Inc.A SeriesofDojiIfoneDoji represents indecision, a seriesofDoji represents a lotofindecision.Finding a series ofDojiisthe set up for some powerful trades. Observing aseriesofDoji should alert investorsthatthe Bullsandthe Bears are having ahardtime deciding which direction the trend should be moving.Themoreextensive the series, (the longer the indecision time frame) the more convinc-ingthetrendwillbe once it breaks out.AseriesofDojiisanexcellentwarningdevice. It illustratesthatsomethingisabouttohappen. Logically,ifa seriesofDoji occur in oversold condition,whatshould occurisa movetotheupside. Conversely; a stringofDoji,seeninthe overbought condition, usually indicates thetrendisabouttoturndown.The caveat to witnessing a largenumberofDoji forming is analyzing the previ-ouschartformations. A trading entitythathas Doji forming a high percentage
of the time willnotbe as significantly influenced by more Doji. A series of Dojibecomes more significantwhenfound in a nonnal trading chart.Asillustrated inFig.2-16, the Frontier Oil chart, after a mild sell-off theinvestors became very indecisive. This indecision occurredasthe stochasticscarne into the oversold condition. One Doji, inanoversold condition, calls tothe attention ofaninvestor towatchfor a reversal. Watching a series ofDojidevelop allowsaninvestor to take advantageofa strong trend developing rightfrom the very start.""31''''"0-.TheMajorSignals.1'~It1tt;:ive Doji's in a'owdenotes indecision.~When this indecIsionoccursin overso a____condlt'on, a bullish candleshoL,;ldbe________ anticipated with a high percentof__.------probability, sta'ting~gooduptrendC"'---==:;~-~~----:::::;:::;:::;:::;;::::::;;::::::;;;;:;~;:----=:=~;::;;:1.~-...<,'""''''~]]L__.'::;~~---,---,---,---,---,=---,=---,~,.i"f=,-,if,-',••, , " , ,. ,",,II," I,1",,,,",V,,,,,I,,,.,"llllll,111"',11111 11111IIIll)1IIIII10""'0,"'2','P-,.,1<;"""'-."'.'Fig.2-16FrontierOilCorp.What does a series ofDojirepresent? Indecision! What does the bullish candleillustrate after the seriesofDoji? The investors have now made up their mindwhich direction to take the trend. With that knowledge, it becomesaneasyprocess towatchwhich direction the trading will move from that indecisiveperiod. The candlestick investor canstanputting on the trade as soon as theprice movement has indicatedthatthe indecisionisover. A strong move, fromanindecisive trading range,isanextremely high probability indicator.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 411 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
N/A
Tags

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture