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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: JRI who wrote (37817)	12/11/2000 12:27:33 AM
From: Lee Lichterman III	Read Replies (4) of 42787

Donald is the candlestick guru but I will take a whack at it until he can answer you. Each formation has it's own strength and duration. Some patterns are merely hints of possibilities while others have an extremely high degree of both reliability and lasting effect. That is where the art and complete knowledge of the sticks comes in. I tend to only trade on a few and use formations, indicators and trendlines more than the sticks themselves being primary. Don puts more strength in the sticks I think along with his indicators and fib levels. Each trader weighs them differently for making decisions. Each formation also has it's own strengths and durations as I said. The last nasty 3 black crows we had had a large dlay before being fullfilled. I generally like to see an effect within a few days max when using daily sticks. Time period has a lot to do with things too. The Dollar index made a weekly bearish engulfing pattern so while the next day may not have an affect, over the next couple weeks, I expect to see more weakness after this bounce. A daily one would need to do something within a few days and intra day I want to see something within hours or I consider it negated. Dojis are often nothing more than indecision sticks and tus are not always that reliable. A three soldiers or three crows on the other hand is stronger. General rule is a multi candle formation is usually higher percentile than a one day formation. Are there more than 32 formations. OH YEAH!!!!!!! There are hundreds if not thousands. Nison is a long time candlestick trader that has written many books on the subject. if you are interested, i would start there. As for intra day movements, you can use candles in any time frame and I often use candles intra day in my trading. I actually give more credence to intra day sticks than daily ones since I feel the last 1/2 hour of trading is subject to too much dressing up. How many times have you seen heavy down days with millions upon millions of shares dumped at lowering prices only to have a light volume rally in the last half hour to make things look like it was a flat day? Can you use candlesticks on individual stocks, yes, definitely IMO. I do and so do many others. As for futures being limit up. Fair value is so high they almost have to be limit up just to get back to even and on the NASDAQ it is even higher. By my computations, we need to be limit up on teh SP00s just to get to even ( and as of right now we aren't there yet). On teh NASDAQ we need almost double lock limit up to get even. Therefore, this doesn't tell us much except that they aren't selling anymore yet but we have no idea how much they are buying. Good Luck, Lee

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