Candlestick
Examples
Courtesy of Candlestickshop.com
Daily Candlestick Charting
Weekly Candlestick Charting
3 White Soldiers (Weekly) Candlestick Play
Instructions
Step 1 - Pull up a Weekly chart of the stock after the
market closes for the week (Friday after close).
Step 2- Look for THREE WHITE SOLDIERS against MINOR PRICE
RESISTANCE, and/or against the declining Major Moving Average (10 MA, 20 MA,
or 50 MA) on the Weekly chart. Place the stock on your watch list for the
upcoming week.
Step 3 - Allow the stock to trade one full day. Pull up a
Daily chart of the stock after the stock has formed the first daily
candlestick of the week (Monday after close).
Step 4 - Look for a BEARISH HARAMI candlestick against
MINOR PRICE RESISTANCE, and/or a declining Major Moving Average (10 MA, 20
MA, or 50 MA) on the Daily chart.
Step 5 - Sell short only if the stock breaks 1/8th below
the low of the previous HARAMI candlestick. If the stock does not break the
previous day's low, DO NOT ENTER THE TRADE.
Step 6 - Mark off the 50% retracement line. This will be
the halfway point between the line of resistance where the stock began it's
decline, and the line of support where the stock begain it last major rally.
Step 7 - After entry, place an initial protective stop
1/8th above the high price of the previous day's candlestick. Cover the stock
immediately if the stock breaks above this price.
Step 8 - On each new day, adjust the trailing protective
stop to 1/8th above the previous day's candlestick's high price. Continue to
use a trailing stop as long as the stock remains above the 50% retracement
line.
Step 9 - After the stock has broken below the 50%
retracement line, look for a reversal candlestick. This will most likely be a
bullish candlestick which closes near it's high price of the day. Cover the
stock for profit either before the market close, or at the market open the
next day.
Financial Ad Trader
© Copyright 2003 Sunset Capital Management Ann Arbor, Michigan
