TMT Chart, page-1871

Somewhere along the line there has to be a belief that if a stock is in an uptrend then for the uptrend to continue there has to be higher highs created so some sort of follow through is required. If there is no follow then cutting loses becomes the important option. Similarly, if a stock is still in a downtrend like TMT was on Thursday and a double top is formed then a higher high like yesterday is proof that the buyers have got the better of the sellers for that day but follow-through by buyers is required if the uptrend is to continue. It is the same sort of thinking that gets people buying to add to positions when they see a single red candle followed by a green candle because although the red candle represents sellers in control a green candle the next day shows the sellers have been unable to follow through. What I am trying to teach myself at present is to only lose one candle if there is no follow through and a red candle breaks and closes below the top green candle like we saw in the trading day following May 15.