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Three Treacherous Technical Patterns on the Dow Jones
It is absolutely imperative that traders pay close attention to key technical patterns, especially when it could cost them thousands of dollars.
In June 2018, it was safe to say the market was in train wreck-mode.
In fact, on June 19, 2018, the Dow Jones fell more than 350 points on fears of trade war escalation with China. At the time, President Trump threatened to impose another $200 billion of tariffs on Chinese goods if Beijing follows through with its promise to retaliate against our first round of tariffs.
Engulfing Candlesticks: How to Spot Them and What They Mean
To the average trader, candlestick patterns are a bunch of crosses and odd shapes with bizarre names, like the three black crows, or the abandoned baby bottom.
But as odd as they may sound, they can provide powerful insight into direction.
For example, one of the oddest ones is the doji cross. But if you spot one of these at top or bottom of trend, you may have uncovered an opportunity to trade a trend reversal. The profit stars, more commonly known as dojis, are commanding reversal signals. These are formed when the candlestick opens and closes at the same level, implying indecision in the stock price.
These Technical Indicators are Musts for Your Trading Plan
Every time you trade a stock, it’s essential that you understand the psychology of the buyers and seller. If not, you begin to run the risk of losing money.
That’s the last thing any of us want to do.
So, we need to understand if the bulls have gotten ridiculously, and unsustainably bullish. And we need to understand if the bears have begun to lose their minds after a sell-off.
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