From Page 321 -322 Millionaire Traders:
Q : Do you wait for a red candlestick to develop before you
initiate a short?
A: Yes. I not only do that, but I don’t try to pick exact tops and
I don’t try to pick exact bottoms. I don’t really care if the thing is
trading at 770 at the top and I get short only at 765 because I know
it’s going to 762. I’ve gotten burned way too many times trying to
pick tops and bottoms. I’d rather know where it’s going. All I care
about is where it’s going.
Q: What gives you confidence in knowing where it’s going?
A: The candles, the volume.
Q: In candles what you are looking for?
A : I’m looking for a medium-size candle with a small wick on
both sides. Those are golden.
Q: Okay.
A: I’m looking for the big fight, like just a small wick on top and
bottom. Then I will get inside that candle, inside that fight and I
will put my orders inside that candle and usually put my stop three
to five ticks above the body of the candle.
Q: So not even above the top of the candle?
A: No. No the true fight, where the fighting is going on that’s the
body. Not the wicks, the wicks are worthless.
321
Millionaire Traders
Q: Really? You don’t even use the candle high/low as your reference
points? It’s only the body of the candle that you’re interested
in?
A: The body, I use the bodies. I love the bodies.
Q: In that kind of a scenario, generally how frequently do you
get stopped out versus you being right?
A: Rarely. I think it’s about an 88 percent of the time, I’m right.
Aren’t the wicks where the real battle occurred? Price went to an extreme and got moved back. The wicks are like the red zone in football. Defense gets tough there. What are your thoughts?