Strong candlestick sell signals produce much stronger results when going with the market trend. Strong candlestick sell signals identified in the market indexes produce much greater probabilities of good short position profits. The Dow demonstrated Doji’s right at the 200 day moving average in the overbought condition. The Doji rule made it very easy to analyze whether the 200 day moving average was going to act as a resistance level. The lower open on Friday produced a high probability the market trend was heading lower. That was additionally confirmed with the NASDAQ gapping down on Friday and closing well below the T line. Unofficial statistic – a close below the T line after witnessing a candlestick sell signal is likely to produce a downtrend with a 90% probability or greater. You can greatly improve your profitability by knowing what the results are from candlestick signals, patterns, and the T line. If you already have a trading strategy that works reasonably well, adding candlestick charts will make the analysis of correct trades that much greater.
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Good Investing,
Stephen Bigalow
