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Strategies & Market Trends : Candlestick Charting--The unknown indicator -- Ignore unavailable to you. Want to Upgrade?

To: Esteban who wrote (933)	12/10/1997 2:33:00 PM
From: MonsieurGonzo	Read Replies (2) \| Respond to of 1589

Esteban; RE:" Candlestick Confirmation Tactics..." Let's summarize what we know so far, my friend. The essential problems with candlestick interpretations are... (1) ...that sentiment, though expressed well, varies in duration depending upon the persistence of that "sentiment event". Different candle time-slices are required to summarize different sentiment events. Sometimes, we must combine two or more candlesticks (regardless of time-slice) to get the picture. Sometimes we must go inside a candlestick, to see what the real message is. (2) ...that the extent of a given sentiment is difficult to gauge. As a general rule, longer-duration candlesticks indicate greater moves, as weekly charts are more confirming than daily charts. (3) ...that waiting for confirmation for some movements can considerably reduce the size of "trading" profits. (4) ...that continuation patterns are more difficult to read than reversal patterns. (5) ...that indices are generally easier to work with than individual equities, as you said SO well: mass psychology in pictures. >> What I'm leaning towards is taking a position upon receipt of some signal, prior to confirmation, and using trailing STOPs. BTW, OEX 463 +/- 1 appears to be a critical level. Because INDU's UpTrend is no longer intact, one would expect a technical correction here, and then either a DownTrend OR a sideways trading range next. -Steve