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Question from the book

 
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JimSpeer



Joined: 03 Dec 2004
Posts: 136
Location: Milwaukee WI

PostPosted: Mon Dec 13, 2004 11:19 am    Post subject: Question from the book Reply with quote

On page 43 (Prof Candle Trading), there is a chart for a bullish piercing pattern when the STOCHs are below 20.

How would you read the chart re: confirmation? The next day has a significant dark candle. Any comments on the time to buy/confirmation.

JimSpeer
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candlestick1
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Joined: 27 Jun 2004
Posts: 503
Location: Houston, Texas

PostPosted: Mon Dec 13, 2004 12:25 pm    Post subject: piercing signal confirm Reply with quote

You still would want to buy upon seeing confirmation, in the case of page 43, it would have been at the end of the day two days after the signal. the signal is what illustrates a change in investor sentiment, then you want to start watching for the right time to start buying
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JimSpeer



Joined: 03 Dec 2004
Posts: 136
Location: Milwaukee WI

PostPosted: Mon Dec 13, 2004 12:30 pm    Post subject: Confirmation Reply with quote

So if I understand this correctly, just because the next day after the piercing pattern is not white/bullish, it does not negate the pattern.

Is there a pattern or a time frame that you would suggest as a guide that might negate the pattern. Is it significantly different for commodities vs. equitities?

Thanks for the help.
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candlestick1
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PostPosted: Mon Dec 13, 2004 1:03 pm    Post subject: buying confirmation Reply with quote

If it is assumed that the buy signal should be illustrating that new buying is now coming into the trading entity, then I expect to see confirmed buying with in a few days, 3 or 4. The buying does not have to be the next day. The point of seeing a signal is to be ready to buy as the buying appears. it is not unusual to see a day of the bulls and the bears conflicting after a reversal occurs, residue participants of the previous trend. The signal tells you something new has changes in a trend, now watch for more buying to confirm. if you do not see it in the next 4 days, then go on to something else
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JimSpeer



Joined: 03 Dec 2004
Posts: 136
Location: Milwaukee WI

PostPosted: Mon Dec 13, 2004 1:10 pm    Post subject: Good Info Reply with quote

Very informative. Thanks. The concept of confirmed buying ... waiting for buying to appear works for me.

Jim
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