Hey Everyone,
I'm going to post a chart here every time a valid day trade-able candlestick trigger appears on the Russell 2k futures. This thread is intended for people who want to learn about day trading with candlesticks and also because I am bored easily and this is fun for me.
All charts I post here will be off actual signals I take during the trading session so thats why it will be mostly limited to the ER2 contract. But if anyone has any other ideas feel free to post up.
First chart May 13th 2007 10min period ER2
Within the red circle we see a shooting star candle, confirmation of this bearish candle is made with the second red arrow 2 candles later. This is important; In order for the shooting star candle to be deemed valid it must have a candle close below it, not just penetrate the lows "intra-candle". The stop is placed mentally above the shooting star.
If you miss that because you were takin' a pee and then your grandma called and you had to chat just for 40 minutes that's okay because there was a continuation pattern OR for you a second chance signal made by a doji and a close below it marked by the third and fourth red arrows. Remember for any signal to be made valid a CLOSE must be made by the candle after it. This is the technical signal to take action. The stop here is a few ticks above the doji high.
Second chart May 13th 2007 30min period (for you patient people:p )
A spinning top/Doji type candle form showing indecision among us traders exemplified by the blue arrow. The next candle makes a close below that low signaling a short. Why is this? Because doji's show indecision and we have made up our minds that price is better off below that point by closing it below the doji (there are still many of us waiting to join in that sentiment!) shown by the green arrow.
Notice that on the 30 minute price never closes above it's previous 30min high!
Okay, thats it for today these post should get better as time goes on and I become less stupid...