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43 Cards in this Set
- Front
- Back
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A LONG LOWER SHADOW shows us that
WHAT happed during the market's Session? |
Some time during the session -
the market SOLD OFF |
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What do the Japs say regarding
a SHOOTING STAR? |
"Trouble Overhead"
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Explain confirmation in regards
to the SS as compared to the HM. |
Because of the SS's Bearish long upper shadow, we don't need as much bearish confirmation with that line as we do with the HM
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What STORY does the Shooting Star tell us? How does it form?
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That the market is rising in an uptrend and is perhaps becoming overbought. Finally, the bulls refuse to pay any more. The SS forms as the session opens near, or at, what will turn out to be the low. It rises, but the bulls cannot sustain the demand. Bears come in and drive the price back down. Remember, a long upper shadow on ANY candle means SELLING PRESSURE
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How does a hammer help you in determining S&R lines?
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LOW of the hammmer is frequently SUPPORT level
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When does a DOJI's appearance confirm the a potential "turn"?
What can it "signal"? |
When it appears in the context of an uptrend, esp. in a zone of PRIOR RESISTANCE, it can signal a SIGIFICANT TREND SHIFT
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What SINGLE candle pattern, included in a 2 or 3 candle pattern warns you of a potential trend shift? (in what context?)
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GREAT SIGNIFICANCE in the POWER of a DOJI! Especially in the context of a market experiencing a MATURE UPTREND
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Like a ST, the D indicates what in the market?
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complete market balance between supply and demand
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Why can a doji often be an early warning that a preceding rally could be losing steam?
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Cuz a doji session represents INDECISION
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What's an IDEAL DOJI? And what else is "acceptable" as a DOJI?
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IDEAL = Open & Close are SAME price, but this rule is flexible.
When the open and close prices are only a few ticks from each other, you can still consider the candle a doji |
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Explain why the doji is a warning that the framework built by the bulls and bears may soon falter or crumble. (incorporate an old saying)
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"The stock market hates uncertainty"
DOJI = UNCERTAINTY |
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When are DOJI's extremly valuable?
When less valuable? |
When calling market TOPS - especially after a LONG, WHITE candle.
They sometimes lose signal potential when defining market bottoms. |
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Where do the DOJI's possible negative influence at market tops "come from?"
As such, what could be a signal that the bulls have regained a foothold? |
its WARNING that the marekt is INDECISIVE.
CLOSE OVER THE DOJI HIGH |
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While DOJIS appearance in a rally might signal an exhausted market, what about bottoms? Why or why not? Explain
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DOJI's emergence in a downtrend may not portend a bottom (the way it does more so in an uptrend)
Other indicators, must confirm a market turning into a base. |
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In the case of a "bottom" and a DOJI why must other indicators confirm a market turning into a base?
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INDECISION and uncertainty in an OVERSOLD market may just be a resting place before another downtrend resumes
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Explain the bullish/bearish implications of a dragonfly doji (DD)
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Emits BULLISH IMPLICATIONS
It's long lower shadow shows the market fell sharply during the session but buying pressure pushed the price back up to close at or near the session's high |
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What DOJI should you pay particular attention to in a DECLINE?
How is this an "exception" to the normal doji decline rule of thumb? |
DRAGONFLY DOJI - When it emerges during declines that have become oversold.
Normally, DOJI in declines are not important, but the dragonfly doji is an EXCEPTION! |
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What is the bearish counterpart of the Dragonfly doji?
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GRAVESONE/TOMBSTONE DOJI
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If numerous doji have formed on a particular chart, should you view the development as meaningful?
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NO
DOJI is more influencial when it is a RARE occurance |
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Explain an ideal situation in which to use the gravestone doji, what is its strongest point?
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CALLING TOPS OR BOTTOMS
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When is a potential reversal signal of a gravestone doji NEGATED?
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If the candle that forms after the gravestone doji riskes above and culminates in a long white real body, or other positive candle.
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When the market is risking and overbought, and then a doji appears after a tall, white candle, the japs say the market is WHAT?
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TIRED
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Does a doji's emergence fortell an immediate price reversal?
Explain an appropriate way to view the doji |
NO, not necessarily.
An appropriate way to view the doji is that the market is TIRED. |
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What does a doji's emergence FORTELL?
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(NOT AN IMMEDIATE PRICE REVERSAL!)
It may only suggest that the market is VUNERABLE and SUSCEPTIBLE to change. |
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how can a trader use the doji in emergence of an uptrend in regards to resitance?
IF the market closes above that area, the japs say what about the bulls? |
USE THE HIGHEST HIGH between the doji and the prior candle as resistance
BULLS ARE REFRESHED |
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One should stay esp cautious when you see a doji materialize after WHAT? In what context?
What about the PLACEMENT of the doji in regards to that formation, does it matter? |
Tall, white candle in the context of a significant uptrend.
This is true whether a doji is WITHIN the piror long white real body or ABOVE it. |
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When the market is TIRED (according to the japs) what is it susceptible to?
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CORRECTION
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Dojis often work better in as markers of ________ than _____
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TOP REVERSALS than bottom reversals
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How do you decide whether a Near day doji (open and close are very close, but not exactly the same) should be considered a doji?
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COMPARE a near-doji day to recent action! If there are a series of very small real bodies, then do not view the near-doji day as significant, since so many recent periods have small bodies or doji
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What has more bullish/bearish implication than a regular old doji?
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BULLISH implication = DRAGONFLY
BEARISH implication = GRAVESTONE |
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What does it mean when a market is said to be "overbought"?
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it has moved up to far, too fast
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When is the doji most effective at potential top? Especially if what? When is its signal even more powerful?
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If it appears in an extended rally or uptrend, esp. if the market is OVERBOUGHT. Its signal is even more powerful at a resistance level.
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What has slightly more bearish implication than a regular old doji?
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GRAVESTONE DOJI
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Northern and Southern DOJI... what's more effective?
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NORTHERN DOJI are more effective at calling top reversals than southern doji are at calling bottom reversals
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When a doji appears in the MIDDLE of a trading range, what is the suggestion?
Why? |
IGNORE IT
DOJI, like most candle signals, are reversal indicators. Therefore, they need a trend to reverse. If the market is lateral/box, there is no trend to reverse. the doji would not be a signal to place a trade. |
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When are the odds for a turn for a NORTHERN DOJI enhanced?
(2 specific conditions) Whats also imp to remember? |
if the market is OVERSOLD and at RESISTANCE
The more signals you have confirming the same support area or resistance level, the more likely the reversal is. |
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If a doji is "confirming" a potential support level, what should you do?
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This doji takes on more significance and should be heeded.
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as far as a regular old doji in a downtrend, when should its significance be heeded?
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if it confirms a potential support level
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What would be a bullish breakout signal if we see a doji at the high?
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IF WE CLOSE ABOVE THAT LEVEL
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With the HM's bullish lower shadow, one might think that this line can only be bullish. Explain HOW and WHY this is NOT the case.
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Although the shadow is positive, the HM's small real body shows that there is some HESITATION. And the long lower shadow, while it is a PLUS, shows that at some point during the session, the market had SOLD OFF
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Imagine an uptrend becoming overbought, rising on white RB's. Perhaps a glance at the chart tells you that recent R is at this same price level also. Now, a G Doji appears. Describe the story of the market action. Who has "won" control?
When is the signal "complete"? |
The market opens, rises to a much higher price (Shown by the extended upper shadow), then falls to the lows of the session to close. For the moment, at least, the bears have "won control"... when the NEXT candle falls to the downside, the signal COMPLETE
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How does a doji paly an imp role in candle charting techniques when it appears in the context of an uptrend? What can it signal?
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In the context of an UPTREND.
-Esp. in a zone of PRIOR R, it can signal a sig. trend shift or reversal. |
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After a DOJI is formed, is there confirmation necessary? Explain.
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YES! Candles SUBSEQUENT to the doji's appearance confirm the potential turn
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