A Tale of Three Traders.

[Phaedrus]

By my count, the next candle is in on the 12day candles of the chart initiating this thread... does it still indicate a "hold" for the long term trader?

I bet very few people would have noticed that Liz - I'm impressed!



The latest candle on this chart is a "Dark Cloud Cover". These are a Bearish reversal pattern and are identified by :-
(1) Being preceded by a candle with a strong white body.
(2) Opening above the previous candles High.
(3) Closing deeply within the previous candles body.
The greater the degree of penetration into the white body, the higher the likelihood that this is a top. If the black candle does not close below the midpoint of the white candlestick body (marked by blue arrow) it is best to wait for more bearish confirmation following the Dark Cloud Cover.

The lower sensitivity of longer-term systems such as this is the desired quality that stops longer-term traders being flicked out by small adverse price movements. The downside is that signals, when they do come, are late. This is nicely illustrated by the trendline-break of a daily data plot, as below. Such a signal gave a much more timely exit than any derived from longer-term candlestick patterns.



Note that despite the trendline break, ETC is still in a three month uptrend. While this latest candle is definitely Bearish, it nevertheless does have a higher high and a higher low than the preceding candle and so, technically, the uptrend is still intact. On this basis, longterm investors in ETC might well continue to hold, but not many traders would have ignored the sell signals illustrated here.

[Footsie]

I still hold my long term position

My trading position I wont reentrer to there is a close over 50.5

Phaedrus you haven't used the OBV.... shame on YOU!

regarding my long term position, I am cautious given the price movement and restriced further buying , ie. i wont be buying dips.
but i personally believe this is consolidation and the OBV confirms this.
(combined with a 6% drop in the aussie small cap index over 3 days)

A break of the OBV and 40c (previous low) will see me reduce

PS Phaedrus take a look at PWK.asx.... a strange phenomenon with the OBV falling and the stock rallying. must be a rare thing.

[Lizard]

Thanks for the charts Phaedrus.

My time spent making trading decisions is a bit limited at the moment, so it is interesting looking at different ways of managing that. I seem to find my time constraints don't affect the sell decisions too badly, but buying decisions are difficult - the pool of stocks to buy from being larger and the timing constrained by available cash.

[Footsie]

Well this just confirms its still a traders market and fundamentals dont mean nada when the SHTF.

I should theoretically be stopping myself out of ETC today......

with the stock now 30% off its highs..... It sure is a tough one to do.