Hi IHSC,
<< Am I understanding correctly that (with the assumption of further confirmation required) both the dragon fly doji and the graveyard doji serve as bearish indicators after an uptrend and bullish indicators after a downtrend? They BOTH indicate a reversal regardless of the trend? >>
Precisely.
That's what I meant when I said that candlesticks must be interpreted within the context of the chart. Specifically, you have to take into account the trend leading to the candlestick in question, and where that candle sits (support or resistance).
This is generally true. But in the specific case of the Doji candlestick: After an uptrend, when a Doji forms at resistance, that indicates the test of resistance is failing, and a trend reversal will soon follow---i.e., the stock will move down. The exact same candle forming after a downtrend (especially if it sits right on support) indicates exactly the opposite---there will be reversal to the upside.
I think you'll find plenty in that chart school. From there, it is only a matter of looking at lots and lots of charts, coming to some conclusion, then following the chart over time and trying to figure out what was right about your interpretation, and what was wrong, and why.
And, it is always helpful to get other people's points of view. Often, that can open your eyes to something that is plain as the nose on your face, but you just can't see it for some reason.
T |
