Aero, TOL showed a black filled candle, at the top of a trend. Normally this indicates a possible bearish reversal pattern. For those who have followed my explanations on the candlestick charting know that confirmation of the patterns is required. Confirmation can be either the opening price or the closing price in the next trading session.
If TOL opened down this morning, that would be the confirmation needed. If TOL finished down on the day, that would also serve as confirmation.
Since neither of them happened, the trade is to be avoided. If someone made the trade without confirmation, tomorrow's activity should be closely monitored. If up, get out. This may sound radical, but a 3% loss is all I'm willing to take when timing buys with candlestick charting. Afterall, we're using the charts to time our buys and sells. If the timing is off, what's the use?
One of the advantages of using candlestick charting, along with other indicators is that it lets you know immediately if your timing is accurate for short term moves. If the trade goes against you, you don't hold on and turn it into a long term hold. Get out and wait for the indicators to line up again.
Use a daily chart for short term, weekly chart for intermediate term and the monthly chart for long term.
I hope I've answered your question.
dabum |
