MISTAKE IN USING CANDLE STICK MODEL I. CANDEL STICK MODEL 1 (BEARISH ENGULFING) ANALYSIS.
- Two candles create bearish engulfing model. According to theory, it is considered as a strong reversal signal. But we have some problems here :
1. The fist candle in bearish engulfing is hammer and it appears in uptrend. Individually, this model is just say that the uptrend is getting weaker.
2. Bearish engulfing appears at Fibonacci 0.5 AB. Therefore, I concluded that there is still an increase movement to Fibonacci 0.618 AB.
With these reasons above, it is not good for opening entry here.
II. CANDEL STICK MODEL 2 (EVENING STAR) ANALYSIS.
Here, evening star model had been completed. Moreover it appears at Fibonacci 0.618 AB (strong resistance). Therefore it is considered as strong reversal signal. Trader can open SHORT entry when the third candle completed.
Finally, our problem in using candle stick model is which model is reversal, support or decline. We should only open entry when model reflects strong reversal signal.To do this, we can combine candle stick model with other indicators such as Fibonacci (as the way I am using), RSI , SMA , ....etc.
***MINERAL SCALE INVESTEMENT***
***VIKTORTEA***
