Doji Example Review for Decoding Candlestick Charts

How to Develop Spatial Pattern Recognition Skills for Fast & Easy Reading of Stock Charts
When Candlestick Charts were first introduced to the western markets, everyone using Stock Charts and Technical Analysis relied on indicators more than Bar Charts, which were the most popular charts back then. Bar Charts are much harder to read, give less visual data, and take longer to interpret. Candlestick Charts were instantly popular because they made reading price fast and simple.
In the beginning Candlesticks were assumed to be the confirming indicator, which made pure price subordinate to indicators such as MACD and Stochastic both very popular indicators. However decoding Candlestick Charts and using Candlesticks as the entry signal rather than just confirming a continuation of the trend or a reversal of the trend, enables traders to use pure price as their entry and exit signal.
Spatial Pattern Recognition Skills™ SPRS are something most traders do not have, and need to develop. It takes a while to learn how to read Candlesticks as quickly and as easily as you are reading this text, but when you can do so it opens up a world of information about why price is moving as it is and how it will move next.
During Trading Range Market Conditions as we have now, keen SPRS are imperative. Otherwise the markets seem merely volatile, unpredictable, and confusing. By learning SPRS you can speed up the entire analysis process, and find strong picks to trade.
Everyone who uses Candlesticks knows what a Doji Candlestick is, however where it forms can reveal a great deal. As an example using the Doji for decoding Candlestick Charts, the Doji can be a resting day candle and the stock will continue moving down, OR the Doji can be an exhaustion pattern in which the stock will reverse, OR the Doji can expose Dark Pools controlling price.

The reason Dark Pool Quiet Accumulation is easy to recognize in a candlestick formation, once it is understood how giant Institutions using Dark Pools buy and sell, the patterns become obvious and are instantly easily recognized. In the chart example below the tight formation of Doji first being white, then black, and then white again is a Dark Pool Quiet Accumulation Candlestick Chart pattern. 
chart example as doji in a dark pool quiet accumulation - technitrader

Since this is also a compression consolidation of Doji, it is also indicating a likely Breakout pattern. The stock may either run with High Frequency Trading HFT triggers or gap. Entering early in this tight consolidation of Doji, ensures that the trade is executed before a potential run or gap. The more compression there is then the more velocity behind the Breakout, with the pattern definitely favoring an Upside Breakout. The way the Doji have formed in the Candlestick Chart tell the Technical Trader with strong SPRS, that this is an Upside Breakout about to occur soon.
Summary
The chart example also gives other information regarding decoding Candlestick Charts. The stock has bottomed decisively and recently. It has no strong resistance above price. The tight consolidation of Doji was preceded by speculative trading triggered first by Professional Traders, then HFTs, and then Smaller Funds. The stock went sideways as Professionals took profits while Smaller Funds bought. Now it is in a very tight formation. The control of price requires a very specific type of order that only Dark Pools use regularly.
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Trade Wisely,
Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock


Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved. 
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.
Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only. 

Swing Trading Momentum and Velocity Runs

Indicators Signal Entries and Exits
Swing Traders need specific tools to help them choose the best stock picks for the fast-paced Swing Trading Momentum and Velocity Runs that occur, as stocks fall so quickly that Bargain Hunters move in. Bargain Hunting is the realm of the largest lot buyers and occurs mostly on the short term trend.
Sudden reversals with the right indicators can help confirm that the signal is a true momentum signal, and that the stock is poised for sudden momentum or velocity action. This is because Dark Pools quickly remove liquidity creating an imbalance between supply and demand that Professional Traders search for, in order to buy into the Momentum Runs that follow.
By employing one of the professional style indicators such as TechniTrader Quiet Accumulation TTQA, an early alert is shown on the chart as indicated by the green arrow in the bottom chart window.

This stock has fallen into a high of a prior Dark Pool Buy Zone™ price range. The zone or range is below the low of the white candle, but both TechniTrader Volume TT Volume and TTQA clearly show a sudden shift is about to occur. High Frequency Traders HFTs are still trying to sell the stock down, as Retail Traders sell short without recognizing the Shift of Sentiment™ has begun.
The next day HFTs drive the stock down in a few minutes after market open, so quickly that Retail Traders are unable to enter without extreme risk. The risk is that orders in the Dark Pool Buy Zone now trigger, and Time Weighted Average Price TWAP Dark Pool orders quickly move the stock up in the same day. 
The Shift of Sentiment on TTQA which is a professional style indicator, clearly reveals their activity before the stock runs with momentum. Volume is also a key indicator but in a different analysis.
This allows Retail Traders to trade with Professional Traders, who provide reliable and consistent run activity. Instead of chasing a run, Retail Traders are able to trade with the Profesionals. The consolidation is a period of resting. Professionals are taking profits while the Smaller Funds Volume Weighted Average Price VWAP orders are firing off creating the high bars on TTQA. Resistance is the red line drawn above price.
Summary
TTQA is a special indicator that has several different patterns which are easy to read and interpret. It can reveal aspects of who is in control of price, where Dark Pools are buying or selling, and when HFTs are likely to create big sudden moves.
It also shows Professional Trader and Smaller Funds activity. This new type of indicator can be an excellent addition to any Traders indicator tool kit but is particularly useful to Swing, Momentum, Velocity, and Day Traders.
Being able to plan an entry rather than chase a run, is a key ingredient to high income from Swing or Day Trading.
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Followers may request a specific topic for a blog article by emailing info@technitrader.com.

Trade Wisely,
Martha Stokes CMT
TechniTrader technical analysis using MetaStock charts, courtesy of Innovative Market Analysis, LLC dba MetaStock


Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved. 
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only. 

Center Line Price Oscillators


The Benefits of a New Type of Price Oscillator

Most Price Oscillators are designed strictly for overbought or oversold conditions. These indicators work well when price is oscillating between a high and low range, but tend to show overbought signals when a stock is about to go momentum. The tendency for these the older style overbought/oversold price oscillators is to show an overbought crossover signal as price begins momentum action, which often causes Technical Traders to exit a trade just before huge profits could have been captured.

By using a Center Line Price Oscillator during momentum phases of price action Technical Traders can hold, instead of selling just as the stock is about to run with strong velocity or momentum action.

The TechniTrader Center Line Price Oscillator called TTRSI uses a floating center line that provides flexible indicator action as price moves up. It is ideal for momentum and velocity price action as it will reveal the underlying momentum, whereas a standard price high/low range oscillator such as Stochastic shows an extreme overbought pattern that most traders use as an exit signal.

The chart example below shows the TTRSI indicator with center line oscillation in the middle chart window, and Stochastic in the bottom chart window for easy comparison.

chart example with center line oscillation - technitrader

This indicator is designed for analysis of price during a momentum or velocity run, and it is superior to Stochastic for momentum analysis.

Traders using Stochastic would have exited prior to the big gain day missing out on the largest one day gain for this run, that continued the next day. RSI then indicates the run has fatigued, and the risk of profit taking at this point means either exit or tighten the intraday stop loss.

Summary

Center Line Price Oscillators are superior to standard overbought/oversold price oscillators during momentum and velocity Market Conditions. Momentum or velocity price action occurs after giant lot Buy Side Institutions have been accumulating a stock for some time by suing Dark Pools. When Professional Traders and High Frequency Trading firms HFTs discover this accumulation then they drive price upward out of Bottoms, minor Corrections, Platforms, Consolidations, and Compression Patterns.

Using a Center Line Oscillator for price enables Traders to hold longer, and enjoy the gains of a momentum or velocity run.

                                                         Go to the TechniTrader.com
                                                        "Learning Center Webinars"

learning center webinars - technitrader
Followers may request a specific topic for a blog article by emailing info@technitrader.com

Trade Wisely,
Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock


Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved. 
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.