Buy & Sell Signals

    So far we have laid out basic technical analysis terms and tools.

Now we are about to display how to turn these tools into trading strategies.

Before we begin, here are two important guidelines:

1. Open a position only after receiving three different signals that point towards a trend.
2. Open positions that are a part of the general trend of the day.

A trend reversal - Buy Signal

Trading trend: A day defined by a general upward trend
» A Doji appears at the end of a downward trend
» Followed by a green candlestick (A Thrust) with a higher peak point than the Doji's
» The fast MACD line crosses the slow MACD line from below or moves upwards and away from it
» BUY

A trend reversal - Sell Signal

Trading trend: A day defined by a general downward trend
>> A Shooting Star appears at the end of a downward trend.
>> Followed by a red candlestick (A Thrust) with a lower low point than the Shooting Star's.
>> The fast MACD line crosses the slow MACD line from above or moves downwards and away from it.
>>> SELL

A Buy Signal - Breaking a Resistance Level

Trading trend: A day defined by treading or by an upward trend
>> A strong Resistance Level with a multiple failed ceiling-breaking attempts
>> The market breaks the Resistance Level when the candlestick's closing rate is above the resistance level.
>> Another green candlestick that serves as a Thrust appears when the candlestick's peak
point is above the peak point of the previous candlestick
>> The fast MACD line moves upwards and away from the slow MACD line
>>> BUY
>> A candlestick or two later, the short term average line will probably cross the long term average line upwards

A Sell Signal - Breaking a Support Level

Trading trend: A day defined by treading or by a downward trend
>> A strong Support Level with a multiple failed trough breaking attempts
>> The market breaks the Support Level when the candlestick's closing rate is below the support level.
>> Another red candlestick that serves as a Thrust appears where the candlestick's low point is below the low point of the previous candlestick
>> The fast MACD line moves downwards and away from the slow MACD line
>>> SELL

>> A candlestick or two later, the short term average line will probably cross the long term averageline downwards.

A Buy Signal - Using a Support Line

Trading trend: A day defined by treading or by an upward trend 

>> Identifying a Support Line
>> A Hammer appears near the Support Line after a downward trend
>> Another green candlestick that serves as a Thrust appears when the candlestick's peak
point is above the peak point of the hammer.
>> The candlestick graph crosses both average lines that are now moving upwards
>>> BUY

A Buy Signal - Using a Trend Line

Trading trend: A day defined by a downward trend
>> Identifying a downward trend and drawing a trend line accordingly.
>> A Doji appears near the trend line at the end of a local upward trend
>> A red candlestick that serves as a Thrust appears, suggesting the downward trend will continue
>>> SELL

A Buy Signal - A Trend Reversal

Trading trend: A day defined by an upward trend
>> An Engulfing Pattern appears at the end of a downward trend
>> The candlesticks consisting the Engulfing Pattern touch a Support Level or are near it.
>> A green candle that serves as a Thrust appears, suggesting the upward trend will follow.
>>> BUY