re: candle sticks , page-3

kansas

You are partially correct. One shouldnt just look at a trending line with candlesticks BUT actually at the candlestick itself. Each candlestick tells its own story and that story may be re-occurring or bullish or bearish. However a single candlestick might say buy. Would you buy? What if several candlesticks said buy? So yes there is a trend but a line across the trend may not tell you the whole story.

To further complicate the issue watch what happens to a candlestick over a day. It may change its sentiment because the money wants to hide the fact that they are buying.

As an example the candlestick on PEK I was watching along with the GGE price. The PEK one was very bullish and had no wicks early in the morning and just grew longer and longer without breakout wicks. And in the last half hour wicks appeared and then suddenly no real body at all and PEK finished at its opening price. So by buying and with volumes pushing the price up and using a bot to push the price down that trader1 has started building a position. An other trader2 looks across that chart at night and sees only an upside down "T" candlestick (for sake of brevity I wont name that type of candlestick, just put it in laymans terms) and thinks that the stock isnt moving. He notices however the larger volumes and thinks people are selling. Trader2 places an order to sell the next day and finds his stock soaked up by the buyer sitting in the price range below. Trader1 has sprung his trap for daytraders.

The are countless articles about the 500 year old japanese candlestick on the net.

T1