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Thanks!
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, lj93612 <no_reply@xxx> wrote:
>
> --- In equismetastock@xxxxxxxxxxxxxxx, pumrysh <no_reply@> wrote:
> >
> > All,
> >
> > Recently ran across a trading system which used candlestick
doji's as
> > a marker for trend reversals. As I am not a student of
candlesticks,
> I
> > would like to know if anyone else has any advice/experience using
> such
> > a system?
> >
> > Thanks,
> >
> > Preston
> >
>
> Doji's reveal that for the day, their was no dominant crowd that
> prevailed over the other; both bulls and bears battled it out
leaving
> the close very close to the open.
>
> They increase uncertainty that the previous dominant group can
continue
> to hold the trend.
>
> However, with that said, how accurate are they? Not very. Any
system
> based primarily on Doji's is a system doomed to failure. Why? All
> single candlestick patterns have the limitation that they are only
1
> day worth of data. Any system that claims to be able to predict
trend
> reversals on simply one day worth of data (aka a Doji formed
today), is
> a system doomed to failure over the long run.
>
> Crowd psychology is complex, a manic depressive if you will. Trying
to
> determine the emotions of the crowd as it changes over time
requires
> much more than any single day signal like a Doji candlestick.
>
> If I were to rank how I would use a Doji candlestick to help
predict a
> change in trend, the ranking, as compared to other indicators,
would go
> something like:
>
> 1 - Volume
> 2 - ADX -DI +DI
> 3 - ROC
> 3 - MACD
> 4 - Stochastic
> 5 - Chart Pattern (Double Top, Head and Shoulders, Double bottom,
> Inverse Head and Shoulders, etc.)
> 6 - Money Flow
> 7 - Multi-day candlestick patterns
> 8 - single day candlestick patterns
> 9 - Price
>
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