Candlestick
Examples
Courtesy of Candlestickshop.com
Daily Candlestick Charting
Weekly Candlestick Charting
Bearish Harami Candlestick Play
Instructions
Step 1 - Look for a BEARISH HARAMI against MINOR PRICE
RESISTANCE, and/or against a declining Major Moving Average (10 MA, 20 MA, or
50 MA) on the daily chart.
Step 2 - Pull up a 15 min. chart of the stock.
Step 3 - Note the low price of the previous day's daily
HARAMI candlestick. Your entry point is 1/8th below this price.
Step 4 - On the following day, allow the stock to trade
for 5 minutes before entering. Sell short the stock only if it breaks below
the entry criteria (1/8th below the previous day's low) and only after it has
traded for 5 minutes. If the stock does not break below the entry point, do
not enter.
Step 5 - Place the initial protective stop 1/8th above
the high of the previous day's HARAMI candlestick. Cover the stock for a
small loss immediately if the stock breaks above this price.
Step 6 - Monitor the stock as it continues to decline
downward. Look for areas of resistance (either minor price resistance or base
price resistance) on the 15 minute chart, and re-adjust your protective stop
price downward as the stock continues to decline. This will protect your
profits, and/or minimize your losses if the stock should turn against you.
Step 7 - Monitor the stock on a 15 min. chart as it declines
downward, and stay in as long as the protective stop is not violated. Allow
the stock to achieve 1 point or greater profit, and then look for signs of
strength. A reversal candlestick pattern on the 15 minute chart will serve as
a good indicator for a reversal point. After the price reaches an area of
support and strength, cover half of your position. This may occur on the same
day of entry, or on the following day, depending on the weakness of the
stock. Maintain the latest protective stop price for the remaining half of
your position.
Step 8 - Allow stock to continue it's decline. After the
stock has declined further, again look for an area of support where the stock
begins to strengthen and reverse. This could be a DOJI candlestick, or any
other reversal candlestick pattern on the 15 min. chart. Cover the remainder
of the position for profit.
Financial Ad Trader
© Copyright 2003 Sunset Capital Management Ann Arbor, Michigan
