How to trade an EVENING STAR DOJI?
A thread🧵
Let's understand with recent example of #banknifty.
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#StockMarket #StockMarketindia #SGXNIFTY @kuttrapali26
A thread🧵
Let's understand with recent example of #banknifty.
♻️Retweet for max reach.
#StockMarket #StockMarketindia #SGXNIFTY @kuttrapali26
1⃣ What is Evening Star Doji?
🔸It is a strong indicator that a downtrend has started. Forms over a 3 day period. On the 1st day, you will see a big green candle followed by a smaller candle that shows a relatively smaller price rise. The 3rd day will be a large red candle.
🔸It is a strong indicator that a downtrend has started. Forms over a 3 day period. On the 1st day, you will see a big green candle followed by a smaller candle that shows a relatively smaller price rise. The 3rd day will be a large red candle.
2⃣How to identify Evening star doji?
A🔸Establish an existing uptrend: The market should
be exhibiting higher highs and higher lows.
B🔸Large bullish candle
C🔸Small bearish/bullish candle
D🔸Large bearish candle
A🔸Establish an existing uptrend: The market should
be exhibiting higher highs and higher lows.
B🔸Large bullish candle
C🔸Small bearish/bullish candle
D🔸Large bearish candle
3⃣How to trade this pattern?
🔸Looking at the chart, once the formation has completed, traders can look to enter at the open of the very next candle.
More conservative traders could delay their entry and wait to see if price action moves lower.
🔸Looking at the chart, once the formation has completed, traders can look to enter at the open of the very next candle.
More conservative traders could delay their entry and wait to see if price action moves lower.
✅Example 1: Entry after breaching the low of 1st candle.
🔸Entry for safe players coz in 3rd candle sellers has shown their power by breaking the low of 1st green candle.
🔸Entry for safe players coz in 3rd candle sellers has shown their power by breaking the low of 1st green candle.
✅Example 2: Sometimes, 3rd red 🕯️ will form inside the 1st 🕯️.
🔸So, is it not an ESD?
Yes, it is but probability of winning is less as compared to Ex 1.
🔸Why probability of winning is less?
It shows that sellers are not powerful as the low of 1st candle is still intact.
🔸So, is it not an ESD?
Yes, it is but probability of winning is less as compared to Ex 1.
🔸Why probability of winning is less?
It shows that sellers are not powerful as the low of 1st candle is still intact.
🔸Stop Loss: Above the high of the pattern.
✅Target: To establish the target zone, take the distance between the entry to the stop-loss and multiply it by two.
This product will be the distance to your target from your entry.
✅Target: To establish the target zone, take the distance between the entry to the stop-loss and multiply it by two.
This product will be the distance to your target from your entry.
4⃣How to make it more reliable with addition of some indicators?
🔸With RSI:
One more confirmation to trade ESD is to find RSI divergence (any grade).
Here in the pic below, negative RSI div are there and hence the pattern becomes more reliable to trade.
🔸With RSI:
One more confirmation to trade ESD is to find RSI divergence (any grade).
Here in the pic below, negative RSI div are there and hence the pattern becomes more reliable to trade.
🔸With EMA:
We can use 9 period EMA for Intra purpose.
In the pic below, price broke 1st candle's low + EMA's low together.
One can trade with more confirmation on short side when ESD is seen along with EMA breakdown.
We can use 9 period EMA for Intra purpose.
In the pic below, price broke 1st candle's low + EMA's low together.
One can trade with more confirmation on short side when ESD is seen along with EMA breakdown.
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