6/12/2011

The Candlestick Forum

Online Training
June 2011

Stop Loss

What is the Function

of
Stop losses?

1
 6/12/2011

Function of Stop Losses

• 1. Protecting Capital –
• Keep from taking big losses

Function of Stop Losses

• 1. Protecting Capital –
• Keep from taking big losses
• 2. Maintaining Mental Control

2
 6/12/2011

Why do we want to close Immediately?

So we are not watching this trade all day

Function of Stop Losses

• 1. Protecting Capital –
• Keep from taking big losses
• 2. Maintaining Mental Control

• 3. Having Funds Available to put back to

• Positive Use

3
 6/12/2011

Cutting Losses
Short,
Let Profits Run

Candlestick signal Visuals

provide a major benefit

Logical Stop Loss levels

4
 6/12/2011

Simple Rules
Visual Application

What is our biggest

fear when Placing a
Stop Loss?

5
 6/12/2011

Candlesticks reduce that fear of being left behind

Where are the sellers showing control?

6
 6/12/2011

Candlestick Signals
Should have an expected
result

Our Biggest Fear?

•Getting Picked Off

7
 6/12/2011

What is confirmation for a Doji? A Bullish candle

What does the bullish confirmation indicate?

The Bulls are trying to take control!

Rice Traders Halfway point rule

A close below the Halfway point

of the candle that told us the bulls
were in control now shows the
Bears are still in control

8
 6/12/2011

Half way point is a critical area

A close below the ½ way

area negates the buy signal

Doji at Top – Logical Stop Loss?

The Low of the Doji

T-Line

9
 6/12/2011

Bullish Engulfing signal

Halfway point of the Bulling

Engulfing signal

Hammer signals

Hammer signals are showing a potential

change of investor sentiment. They
should be followed by strength

10
 6/12/2011

Hammer Signals

A positive open should not

experience more selling
pressure

Inverted Hammer

A positive open nshould not see any

trading below the body of the Inverted
Hammer.

11
 6/12/2011

Inverted Hammer

An Inverted Hammer and a Doji shows

potential reversal. The positive open
should not see selling back down thru
that level.

Protecting profits

12
 6/12/2011

Gap ups in Overbot areas

At the Open

At previous close

Gap up Doji

Lower open, Resistance

Doji Low

13
 6/12/2011

Signals confirmed

Doji low

T-line Breach

½ now , ½ later

14
 6/12/2011

Where should trading not occur?

What should a trend be doing?

Why did we analyze where it

should be going?

What should be done when

something alters the trend?

15
 6/12/2011

Announcement- what did it do to the trend?

What occurs when an announce changes price direction?

A change of
Investor sentiment!
Get out ASAP

16
 6/12/2011

Where is the trading occurring?

T-line

What level would show trend not working?

17
 6/12/2011

What is the previous trading revealing?

What should not be occurring if Bulls in control?

here
Not Here

18
 6/12/2011

Common sense is portrayed in signals

Where should you place your stop?

19
 6/12/2011

Where should you place your stop?

What else can be seen as requiring stop

considerations?

20
 6/12/2011

If you can expect 70%

winners,
What else can you
expect?

30% losers

21
 6/12/2011

What should be expected? Where is logical stop loss?

Morning Star Signal

Where does it show the bears are in control?

The half way point

of the Bullish signal

22
 6/12/2011

Buying back in, where is the lgical stop?

Where did the buyers indicate they were taking control?

The halfway point of

the bullish indicator

23
 6/12/2011

What is most investors attitude about buying again?

What if a break out occurs?

Buying – what are the expectations?

A gap up after a Doji, through the T-line, where

Should the price go? Where should it not go?

24
 6/12/2011

Where should this be closed out?

A close below the T-line has

statistical ramifications

What are our rules about MA’s?

25
 6/12/2011

No Formula’s
No Price Percentages
Commonsense visual Analysis

26