Ten lessons from my book: “The Ultimate Guide to Candlestick Chart Patterns”
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The larger the candle, the higher the volatility of price action, and the smaller a candle is, the tighter a trading range has become. Increasing candle size indicates expanding volatility, while candles getting smaller shows contracting volatility.
Hammers have a higher probability of being a valid reversal signal when found inside a chart trending downward.
After a single hammer candle forms during a downtrend, the next day’s candle should open inside the hammer price range, or higher, to confirm that a potential reversal higher did take place.
When using the inverted hammer as a reversal buy signal, waiting for the next candle to confirm a move higher can increase the odds of success.
A dragonfly doji can act as a signal for a potential reversal in a downtrend of price action if it happens near the lows in price action on a chart.
High trading volume in correlation with the candle pattern increases the probability of success with positions.
A spinning top candle is primarily used in technical analysis as a signal that a trend or range is changing. If the spinning top candle forms after a downtrend or range in a market’s price action, it can signal a good probability of a reversal higher.
A bullish harami candlestick pattern has better odds of working if it happens on a chart in an oversold area like a 30 RSI, or at a lower 2nd or 3rd deviation from the 20-day moving average.
Individual bullish candles on a chart illustrate buying pressure that drives prices higher from the open to the close. A bullish candle shows that buyers can hold higher prices until the close.
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10 lessons from the book: “How I Made $2,000,000 in the Stock Market” by Nicolas Darvas
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“There are no good or bad stocks, there are only rising and falling stocks.”
“I did not know it but I was already coming up against one of the great pitfalls of the small operator—the almost insoluble problem of when to enter the market.”
His answer was to entry on breakouts of momentum to the upside in stocks in uptrends.
10 lessons from my book “New Trader, Rich Trader.”
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“You need to focus on a sound strategy, system, and trading plan and not profits. Good trading will create your profits, but focusing on your profits will usually lead to bad trading.”
“Before you place the trade, you need to have an exit strategy of how, when, and why you will take profits and what your stop loss will be. You have to plan to sell your stock at a specific percentage loss, price support breach, or trend change.”
Ten lessons from the book “Trend Following” by @Covel
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“There are 4 kinds of bets. There are good bets, bad bets, bets that you win, & bets that you lose. Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future, when the odds are against you.”
“We’re trying to exploit people’s reaction, which is embedded in prices and leads to trends.”
10 lessons from the book “Market Wizards” by Jack Schwager
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“ A way to determine the direction of the general market is to focus on how the leading stocks are performing. If the stocks that have been leading the bull market start breaking down, that is a major sign the market has topped.”
“Another important factor to watch is the Federal Reserve discount rate. Usually, after the Fed raises the rate two or three times, the market runs into trouble.”
What is surprising is not the magnitude of our forecast errors,but our absence of awareness of it. This is all the more worrisome when we engage in deadly conflicts: wars are fundamentally unpredictable. Owing to this misunderstanding of the causal chains between policy & action
“It is impossible for our brain to see anything in raw form without some interpretation. We may not even always be conscious of it.”