Wednesday, June 3, 2009

Doji+Doji=2 Doji=More Confusion???

The Candlestick Doji, what is it? It's a sign that the market is confused. Should we continue to go up? Or, should we be heading down? These are the questions the crowd is asking right now. When the market is confused, bull and bears are matched in strength, which is why the doji forms and now we have two of em! The latest one also confirms as an Inside Bar.




Rule number 1 for the Doji is that you always sell when you see a Doji at the top. This is not the same when a Doji is in a downtrend. The Doji in the downtrend requires a buying day to confirm a reversal. If the price opens lower the next day, close longs or establish shorts immediately. However, if the price does open higher, put a sell stop at the previous day's close. This would be the indication that the sellers have taken over. This creates a relatively low-risk short trade or gets you out of a position very close to the maximum profit potential of a trend.


Rest is as they say Que Sera Sera!



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