On 15 February, Swing Trading Blog | What are the best models of candlestick for shorting Stocks?

Written on 15/02/2008 08: 52 by Craig

If you could only trade 3 candlesticks for shorting stocks, what would they be?

I asked this question by email and it me did not take very long to find an answer. I trade again and again the same candlestick patterns!

Here are my top 3 bearish candlesticks:

It's my favorite of all time on the short side. The key of this candlestick pattern is in having a long tail and a small real body. A rally to a major resistance area and an increase in the volume of the previous day are other factors to consider.

I want to see this model after a very quick to move backwards against the resistance. Give it an added value if it is located just beside a trendline down. I like the first spark plug to be significantly smaller than the second.

Lately, it seems that this model becomes more reliable. I love how this model retains the other traders on the wrong side of a move. It is a clear indication that the bulls have lost control. I want to see a deep penetration in this first candle.

I don't think that chandeliers are the Holy Grail for stock trading. In fact, I think that they are virtually worthless without other factors on the table to save the implications of these.

Factors such as...

A movement against a strong downward trend.A multiple "up-to-date" resistance rally.

So, what are your favorite candle holders to trade on the short side? Those that you find yourself trading more often?

Jun 25, How to Trade a Doji Candlestick Pattern

How do you tell when the market will offer nice pullbacks or when it will trade off of momentum? The easiest way to check this is to look at the ADX indicator.

Readings below 25 indicate that the market will offer nice pullbacks to initiate swing trades. Readings above 25 indicate a strong trend - pullbacks will be shallow or nonexistent.

As long as the ADX indicator is above 25 and sloping up, the market will continue to trade off of momentum. Momentum is lost when it begins to slope down.

It's not a perfect technical indicator (none are) but it does a good job of telling you the current strength of the trend.

Not sure if you already know about this but EWI has their 2013 State of the Global Markets Report available. It's a worthy read - and it's free.

Download it here

I'm not sure how long it will be available so grab it while you can!

Take a look at the following chart:

H&R Block (HRB) recently broke out decisively (arrow) through resistance (highlighted). This stock is now in first pullback mode and could create a nice trading opportunity if it prints a reversal candle.

The one problem that I see is that this stock is in a mature trend which could lead to failure patterns.

Still, this is definitely one to keep an eye on when the market resumes trading.

I know from experience that a stock should move in your favor within a day or two after your entry. If it doesn't then it will likely go against you. Here is a recent trade that I had:

This stock pulled back and formed a bottoming tail and then an engulfing candlestick pattern. So I bought the stock. Then I waited...and waited...and the stock went nowhere. So I dumped it after a couple of days.

The first question that should come to your mind when this happens is:

Where are the buyers?

They aren't there.

Time to get out.

Mar 6, The Stock Market Has Reached an Extreme

How do you tell when the market will offer nice pullbacks or when it will trade off of momentum? The easiest way to check this is to look at the ADX indicator.

Readings below 25 indicate that the market will offer nice pullbacks to initiate swing trades. Readings above 25 indicate a strong trend - pullbacks will be shallow or nonexistent.

As long as the ADX indicator is above 25 and sloping up, the market will continue to trade off of momentum. Momentum is lost when it begins to slope down.

It's not a perfect technical indicator (none are) but it does a good job of telling you the current strength of the trend.

Not sure if you already know about this but EWI has their 2013 State of the Global Markets Report available. It's a worthy read - and it's free.

Download it here

I'm not sure how long it will be available so grab it while you can!

Take a look at the following chart:

H&R Block (HRB) recently broke out decisively (arrow) through resistance (highlighted). This stock is now in first pullback mode and could create a nice trading opportunity if it prints a reversal candle.

The one problem that I see is that this stock is in a mature trend which could lead to failure patterns.

Still, this is definitely one to keep an eye on when the market resumes trading.

I know from experience that a stock should move in your favor within a day or two after your entry. If it doesn't then it will likely go against you. Here is a recent trade that I had:

This stock pulled back and formed a bottoming tail and then an engulfing candlestick pattern. So I bought the stock. Then I waited...and waited...and the stock went nowhere. So I dumped it after a couple of days.

The first question that should come to your mind when this happens is:

Where are the buyers?

They aren't there.

Time to get out.

Mar 26, 7 Deadly Sins of Day Trading

How do you tell when the market will offer nice pullbacks or when it will trade off of momentum? The easiest way to check this is to look at the ADX indicator.

Readings below 25 indicate that the market will offer nice pullbacks to initiate swing trades. Readings above 25 indicate a strong trend - pullbacks will be shallow or nonexistent.

As long as the ADX indicator is above 25 and sloping up, the market will continue to trade off of momentum. Momentum is lost when it begins to slope down.

It's not a perfect technical indicator (none are) but it does a good job of telling you the current strength of the trend.

Not sure if you already know about this but EWI has their 2013 State of the Global Markets Report available. It's a worthy read - and it's free.

Download it here

I'm not sure how long it will be available so grab it while you can!

Take a look at the following chart:

H&R Block (HRB) recently broke out decisively (arrow) through resistance (highlighted). This stock is now in first pullback mode and could create a nice trading opportunity if it prints a reversal candle.

The one problem that I see is that this stock is in a mature trend which could lead to failure patterns.

Still, this is definitely one to keep an eye on when the market resumes trading.

I know from experience that a stock should move in your favor within a day or two after your entry. If it doesn't then it will likely go against you. Here is a recent trade that I had:

This stock pulled back and formed a bottoming tail and then an engulfing candlestick pattern. So I bought the stock. Then I waited...and waited...and the stock went nowhere. So I dumped it after a couple of days.

The first question that should come to your mind when this happens is:

Where are the buyers?

They aren't there.

Time to get out.

On 12 August, follow me on Twitter

How can you tell when the market will offer pleasant retreats or when it is negotiated out of momentum? The best way to check is to look at the ADX indicator.

Readings below 25 indicate that the market will offer nice declines to initiate the swing trades. Readings above 25 indicates a strong trend - setbacks will be low, or nonexistent.

As long as the ADX indicator is greater at 25 and sloping upwards, the market will continue to trade off the coast of momentum. Momentum is lost when it starts to go in lowering.

It is not a perfect technical indicator (are), but it does a good job of you say the current strength of the trend.

You do not know if you already know about this but the EWI has their 2013 report state of markets available. It's a worthy read - and it's free.

Download here

I do not know how long it will be available then take it while you can!

Take a look at the following table:

Block H & R (HRB) recently broke out (arrow) firmly through the resistance (highlighted). This stock is now in mode first recoil and could create a great trading opportunity if it prints a reversal candle.

The only problem I see is that this stock is in a mature trend that could lead to failure mode.

However, it is certainly one to keep an eye, when the market resumes its trade.

I know from experience that a stock has to move in your favor in a day or two after your entry. If not then it will probably go against you. Here is a recent job that I had:

This stock has pulled back and formed a tail at bottom, then an engulfing candlestick pattern. So, I bought the stock. Then I waited... and waited... and the stock has gone nowhere. If I dump a few days.

The first question that comes to mind when this occurs is:

Where are the buyers?

They are not there.

Time to get out.

Party fashion by Andrew Asch

From left, Edwin Hiatt, Dar Morris, a designer and Gilly Aragon, a Visual merchandiser.

Fashion market started yesterday. It's a great excuse for a party.

A reception was held in the main hall of the California Market Center. We were looking for party-goers with the best style. Some of them in this blog. More to come in number of California Apparel News Friday.

Oliver Malin a company called the mismanagement, photo of left and Clara Lago de Pitusa.

Like what you just read? Click here to sign up and save!

Jul 31, 4 Example Trades For Swing Traders

How do you tell when the market will offer nice pullbacks or when it will trade off of momentum? The easiest way to check this is to look at the ADX indicator.

Readings below 25 indicate that the market will offer nice pullbacks to initiate swing trades. Readings above 25 indicate a strong trend - pullbacks will be shallow or nonexistent.

As long as the ADX indicator is above 25 and sloping up, the market will continue to trade off of momentum. Momentum is lost when it begins to slope down.

It's not a perfect technical indicator (none are) but it does a good job of telling you the current strength of the trend.

Not sure if you already know about this but EWI has their 2013 State of the Global Markets Report available. It's a worthy read - and it's free.

Download it here

I'm not sure how long it will be available so grab it while you can!

Take a look at the following chart:

H&R Block (HRB) recently broke out decisively (arrow) through resistance (highlighted). This stock is now in first pullback mode and could create a nice trading opportunity if it prints a reversal candle.

The one problem that I see is that this stock is in a mature trend which could lead to failure patterns.

Still, this is definitely one to keep an eye on when the market resumes trading.

I know from experience that a stock should move in your favor within a day or two after your entry. If it doesn't then it will likely go against you. Here is a recent trade that I had:

This stock pulled back and formed a bottoming tail and then an engulfing candlestick pattern. So I bought the stock. Then I waited...and waited...and the stock went nowhere. So I dumped it after a couple of days.

The first question that should come to your mind when this happens is:

Where are the buyers?

They aren't there.

Time to get out.