Читать книгу Candlestick Charting For Dummies - Russell Rhoads - Страница 36

After more than 25 years of using candlestick charts to inform my trading decisions, I can honestly say that I have a difficult time coming up with any substantial arguments for using other common types of charts.

In the interest of fairness, however, and to help you realize the truly versatile and useful nature of candlesticks, I offer a couple of minor potential chinks in the armor of candlestick charts:

 They don’t work in the very short term. Candlestick charts are an excellent way to display price action, but for some extremely short-term trading strategies, such as holding for a matter of minutes, the patterns that reveal themselves on a daily candlestick chart may not develop on a much shorter time frame — fewer than 5 minutes, for example.I like to think of candlestick charts as being visual representations of the battle between the bulls and bears, which is played out in the price action of a stock. That battle takes some time to play out, so patterns on a very short-term chart may not produce signals that can be interpreted properly and traded on.Candlesticks aren’t as useful in intraday “scalping” (buying or selling in a matter of seconds) or day-trading strategies in which hold periods are generally shorter. Candlesticks are a bit more useful for periods where behavior is developing over time versus the reactionary trading of day traders.

 They don’t reflect trade volume outside regular market hours. The advent of increased electronic trading means that significant volume is sometimes traded outside regular market hours. This trading can cause patterns that keep the full picture from appearing on a candlestick chart.If a stock officially opened at 9:30 a.m. at a price of $50 but traded as low as $49 during the premarket hours (on an electronic trading network), the open may not be a true reflection of where the stock initially traded on the day. As a result, the open recorded on the candlestick is somewhat inaccurate. Also, if the stock never trades down to $49 during the day, the low on the chart may not be an accurate depiction of the day’s price action.