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Strategies & Market Trends : Technical Analysis With Charts

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From: MACD X	3/23/2007 12:24:45 PM
	of 6865

Introduction of new ideas and thoughts orphan candlesticks. stockcharts.com There is something that I have observed from looking at millions of charts, and is a tool that I am close to adding to the tool box. It is what I call orphan candlesticks. It has been my observation that during a wave move on a chart that there is a candlestick that occurs in the exact middle of the wave that is different and stands out. This is not clear to the untrained eye, but if you understand what I am about to explain you may become aware of it. This candle stick will usually be large and more times than not White in down trends, but the color really doesnt matter. What matters is that the candle stick will stand out alone, there will be no other candle sticks around the orphan candlestick. The chart above is a trade that I hope gets filled today. I placed this trade several days ago as a limit order at 56.75 which is a price that would make the orphan candle in the exact center. The gap down day excites me in that this will likely be a good trade. My stop will be just below todays low. This causes low risk entry in a bottom picking attempt that really isnt that risky. Other orphans are marked on the chart with blue arrows. The large white orphan that is circled is the orphan that caused the desire to enter this trade. It should be the exact center of the total down wave that is in progress. If this turns out to be a legitament orphan the profits could be substancial as the counter rally may retrace 50% of this large move down. We will track this and see how it works out. Now that I have revealed the orphan candlestick on this post I may add it to the tool box and draw more attention to it in the future.

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