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Strategies & Market Trends : Stock Attack -- A Complete Analysis
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To: PMG who wrote (27382)8/11/2000 8:58:54 AM
From: donald sew  Read Replies (3) of 42787
 
PMG,

An INVERTED HAMMER does not have to be BLACK. Its just a small body with a UPPER SHADOW of 2-3 times the length of the body and no LOWER SHADOW.

I highly recommend CANDLESTICS for short-term analysis. Of course it doesnt work all the time.

To really understand CANDLESTICs one needs to understand the psychology behind them. For example, there is a runup of several days then a DOJI appears. A DOJI is where there is no body, so the close and open were about the same, with upper and lower shadows. A DOJI implies indecision since there was no firm direction, and when indecision arrives after several days of a runup that is a hint that a short-term top is near. So its important to not just know the definitions of a certain candlestic/pattern but to go deeper into the psychology of candlestic. I also do not always use the textbook definition.

Personally, I love candlestics since they are so poetic in terms of their names and the way they can help explain the short-term psychology of the market.

It was interesting when my mother one day looked over my shoulder and said that my grandfather, who I never met, used them extensively when he was trading rice and spices in southern CHINA during the late 1800's/early 1900's.
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