ATMASphere Aug 2014

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Tip # 3. Look for wide range candles Wide range candles mark important changes in sentiment on every chart - in every time frame. They mark important turning points and can often Be used to identify reversals. Take a look at the Following stock chart: This stock was moving lower in October (highlighted) and then suddenly it dropped more significantly than on previous days. This created The wide range candle and it marked an important turning point (actually the bottom!). You can also use wide range candles to identify when a stock might reverse. Looking at the same chart. AUGUST <strong>2014</strong> ATMASPHERE | 10
This stock reversed inside of prior wide range candles. Why would a stock do this? Because all of the traders that missed out on "the big move" now have a second chance to get in. This buying pressure causes the reversal. Tip # 4. Narrow range candles lead to explosive moves Narrow range candles can also tell you that a reversal is imminent. This low volatility environment can lead to explosive moves. Narrow range candles tell you that the previous momentum has slowed down. Buyers and sellers are in equilibrium but eventually one of them will take control of the stock! Tip # 5. Find rejected price levels On candlestick charts, lower or upper shadows on candles usually mean that there is a hammer candlestick pattern or a shooting star candlestick pattern (if the shadow is long enough). Regardless of the name, these shadows mean one thing: A price level has been rejected. Imagine what this hammer candle looked like during the day (before it became a hammer). It was really bearish! But, at some point during the day, the bulls rejected the lower price level. I can imagine the bulls saying, "Hey wait a just a second. You bears have taken this too far. This stock is worth much more than the price that you moved it to." And the buying begins. AUGUST <strong>2014</strong> ATMASPHERE | 11
Page 2 and 3: CONTENTS Letter from the President
Page 4 and 5: EDITOR’S NOTE In this issue - 1.
Page 6 and 7: 2. Symmetrical Triangles: These are
Page 8 and 9: 5 Price action tips that will make
Page 12 and 13: Rajat Dutta is a system designer an
Page 14 and 15: 5. High quality trades, many times,
Page 16 and 17: method that we will follow. Now why
Page 18 and 19: Understanding Market Profile Introd
Page 20 and 21: Hi, I often go with nick name Pit T
Page 22 and 23: Within an average period of less th
Page 24 and 25: World's FIRST E-Library of Technica
Page 26 and 27: AUGUST 2014 ATMASPHERE | 26
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ATMASphere Aug 2014

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