entry & exit clues part 2 trend... · moving average pull backs (bullish) entries & exits...
TRANSCRIPT
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Entry & Exit Clues
Part 2
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Golden Rule
Candlesticks and patterns require three criteria
for proper interpretation:
1. A Completed Line
2. Shape of the line of pattern
3. The Preceding Trend
![Page 3: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/3.jpg)
Basic & Best Candlestick Signals
Basic Candlestick Reversal Signals • Doji/Spinning Tops
• Engulfing Patterns
• Hammer/Hanging Man
• Piercing Line
• Dark Cloud
• Harami
• Shooting Star
• Morning Star
• Evening Star
• Inverted Hammer
• Kicker
![Page 4: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/4.jpg)
Supporting Clues
Non Candlestick Supporting Clues
• Moving averages (8 EMA, 20 SMA, 50
SMA)
• Trends
• Support/Resistance
• Stochastics (12/3)
• Voided Patterns
• Daily & Weekly Charts
![Page 5: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/5.jpg)
Doji
The trend is tiring or Indecisive
Tombstone after uptrend
![Page 6: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/6.jpg)
Doji/Spinning Tops
The trend is tiring or Indecisive
![Page 7: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/7.jpg)
Why Alternative Entry?
• Lower Risk - Higher Rewards
• Trade While You’re Away (Conditional
Orders with Tight Stops)
![Page 8: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/8.jpg)
High Reward/Risk Patterns
• Continuation Patterns • Moving Average Pull Backs
• Moving Average Crunches
• Rounding Tops & Bottoms
• Windows & Gaps
• Failure Patterns
![Page 9: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/9.jpg)
Moving Average Pull Backs (Bullish)
Daily Chart Weekly Chart
Pull Back to 100 Day SMA
Pull Back to 20 Week SMA
![Page 10: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/10.jpg)
Moving Average Pull Backs (Bullish) Entries & Exits
Daily Chart
1
1. First Entry Doji at the 50 & 100 Day SMA—End of Day
2. Secondary Entry Breaking 8 Day EMA—End of Day
3. First Stop Loss Below Swing Low
4. Profit Stop: Close below 8 day EMA or Violation of the low of the close below
These Entry & Exits can be used in reverse for Bearish Trades
2
3
4
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Moving Average Pull Backs (Bearish)
Pull Back to 20 Day SMA
![Page 12: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/12.jpg)
Moving Average Crunches
Moving Average Crunch
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Rounding Top
Gentle Roll Over Notice the number of Legs Up This was a late stage failed Based
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Rounding Bottom
Rounded Bottoms & Tops Can Be Long Term
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Rounding Bottom
![Page 16: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/16.jpg)
Windows and Gaps
Candles are disjointed (do not
touch). Whole window/gap is
support/resistance. Opposite
side is strongest S/R. A close
through the window voids it.
![Page 17: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/17.jpg)
Bullish Gaps
![Page 18: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/18.jpg)
Bullish Gaps: Rules
1. Gap Up Entry—End of Day
2. Secondary Entry Breaking 8 Day EMA—End of Day
3. First Stop Loss Below Swing Low
4. Profit Stop: Close below 8 day EMA or Violation of the low of the close below
These Entry & Exits can be used in reverse for Bearish Trades
1
2
3
4
![Page 19: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/19.jpg)
Bearish Gaps
![Page 20: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/20.jpg)
Bearish Gaps: Rules
1
2
3
4
1. Gap Down Entry—End of Day
2. Secondary Entry Breaking Low of Day 1
3. First Stop Loss Above High of Gap
4. Profit Stop: Close above 8 day EMA or Violation of the low of the close below
![Page 21: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/21.jpg)
Failure Entries & Exits For Swing Trades
o Breakout Failure
o Breakdown Failure
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Breakout Failure
Early Entry when price falls back
below horizontal resistance after
brief breakout. Target is nearest
low or bottom of any channel.
T1
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Breakout Failure Example: IWM
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Breakdown Failure
Early entry when price rises back
above horizontal support after
brief breakout. Target is nearest
high or top of any channel.
T1
![Page 25: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/25.jpg)
Breakdown Failure Example: DIA
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Test Yourself
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Take the trade?
Why or Why Not?
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Take the trade?
Why or Why Not?
![Page 29: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/29.jpg)
Take the trade?
Why or Why Not?
![Page 30: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/30.jpg)
Too Late?
Take the trade?
Why or Why Not?
![Page 31: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/31.jpg)
Close?
Why or Why Not?
![Page 32: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/32.jpg)
Close?
Why or
Why Not?
Go Short?
![Page 33: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/33.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 34: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/34.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 35: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/35.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 36: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/36.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 37: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/37.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 38: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/38.jpg)
Close?
Why or
Why Not?
Go Short?
Go Long
![Page 39: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/39.jpg)
![Page 40: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/40.jpg)
1 4
3
2 6
5
1 = + 20.9% 2 = -26.56% 3 = +10% 4 = +42% 5 = -9% 6 = +9.8%
![Page 41: Entry & Exit Clues Part 2 Trend... · Moving Average Pull Backs (Bullish) Entries & Exits Daily Chart 1 1. First Entry Doji at the 50 & 100 Day SMA—End of Day 2. Secondary Entry](https://reader030.vdocuments.us/reader030/viewer/2022040412/5f02a7897e708231d405585f/html5/thumbnails/41.jpg)
Summary
• Candle Lines & Technicals combined with a few easy to recognize patterns provide a very powerful trading tool
• Candle Lines show changes in momentum, potential reversals
• Technicals show potential reward and limit of potential risk
• Remember the Golden Rule and trading checklist.
• The buy of the year comes around about once every week!