Hey guys, glad to be back. Wow what an exciting trading day today. It seems that Yangzijiang has broken its support level of 1.39 today and is heading southwards toward the next level of support which is at 1.26.
As predicted, the support level which broke at 4pm today (Yes I was in class and monitoring the market Roflol) saw this counter plunge from a cool 1.39 to 1.31 in an hour.
So, whats gonna happen tomorrow? Too bad we're not gonna witness any Wall Street massacre tonight =\ *Disappointed* (My apologies to all invested long) haha~ But well we gotta adapt right? When market forces are going North, you go North When it goes south, You go SOUTH duh.... ~
Now let me open my 522 pages long Candlestick bible by Mr Gregory L. Morris and analyze today's candle for Mr. Yangzijiang here.
*Flip Flip* Lets turn to Chapter 3 Page 36. And say a short prayer. Please refer to my top left diagram.
We have witness what is known as an Bearish ENGULFING ( - ) 2 Day Pattern.
Commentary
The engulfing pattern consists of two real bodies of opposite colour. The second day's body completely engulfs the previous day's body. The shadows are not considered in this pattern. If the bearish engulfing pattern appears after a sustained move, it increases the chance that most bulls are already long. In this case, there may not be enough new money (bulls) to keep the market uptrend intact.
Rules of Recognition
- A definite trend must be underway.
- The second day's body must be completely engulfed by the prior day's body. This does not mean that either the top or the bottom of the two bodies cannot be equal, it just means the both tops and bottom cannot be equal.
- The first day's color should reflect the trend. White for uptrend, black for downtrend. Yangzijiang was on a 3 day rebound (Uptrend)
- The second real body of the engulfing pattern should be the opposite color of the first real body (Isn't it obvious Mr Gregory?).
Tomorrow Yangzijiang's gonna take a beating. How massive i dont know. But a beating im 75% sure.
REMEMBER to always put a Stop Loss of 10-15% for trading.
If you have $100 and you lost 10%, you now will have $90. How much will you need to regain to $100? Ans : $10 which is 11.11% of $90. However, if you do not put a Stop Loss and continue holding to $50, now how much would you need to regain back to $100? Ans : $50 which is 2X what is needed.
Good Luck and Let the Trading Begin. =D
2 comments:
Hi
If my strategy is to stay invested in the long term - do i still have to adopt the cut loass at 10%/15% approach?
Long term i would suggest a cut loss still. However, adjust your cut loss from the previous high instead of the price you bought. For example, if you bought a stock at $1 and it rallies to $2, you must adjust your cut loss to 10-15% of $2 whichever is more comfortable for you. So if the stock drops till $1.70-1.80 you take your $0.8 profit and go.
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