Candlesticks

Q: Did anyone that pays attention to candlestick signals notice, that the signals don't work as they used to? I have checked many stocks that show signals, such as a Morning Star (followed by a white candle, a Bullish Engulfing or a Piercing pattern, and often it turns the wrong way next day. Is it caused by this jittery market, or the daytraders, or.... Comments?

A: I've been wondering when someone else would catch on, and who it would
be, it's been happening for 3-4 weeks now. It appears that the charts
are being carefully painted, and if you base your trading decisions on
standard TA indications, you are part of the target population for the
current shearing cycle. Watch the tape for market feel, t

hey'll get
over it in a few weeks once they realize that we're onto them. I've
been looking at stochastic in particular and laughing my ass off.

Could this just be paranoia on my part? That's certainly possible, I
was giving it a fair amount of credence until your post appeared.


Who would it be? Has to be some large institution that has some very
slick TA oriented traders. Merrill comes to mind. But of course, it's
just paranoia. It could simply be that so many people are working
with candles now that the game has changed itself.


Good points, Stoxx. No, I am not trading on candlestick signals now.
Strictly fundamentals and the trends. I also try to stay away from negative
earnings stocks (and I'm still getting burned!!).
I just do a bit paper trading stocks manifesting a clear candlestick signal
and more and more I notice that something smells in Denmark. I am glad, I am
not alone noticing it.


I trade candles using stoch below 20 using G.L.Morris's book,
Candlestick Charting Explained. Works well and far less trades.