Nikkei General MatrixArrows above or below the daily candles point the direction of a position taken at the close of the previous daily candle. Dots represent the trailing stop loss positioned above the highs or below the lows of bigger candles.
We use the marked levels and the time stamps, or the price action around the shapes, to look for potential support and resistance levels, rebounds, candlestick shadows that might be left behind by the future direction of the price.
A bullish candle can be the beginning of a bull move and the other way around for a bear candle. Not all candles are good signals and picking the right candles can be very tough, as some of them might end in stop losses without profits. Being in the right direction in the bigger moves which lead to trailing stop losses that close with profits can cover those losses and hedging positions in case of market indecision and consolidation can also be profitable, in case the market rallies after that consolidation: in this case, one position closes with a loss or break even (depending on the managing of the position), but another might position the trader on a power wave that leads to bigger profits.
Such approaches can lead to nothing in stagnating markets and choppy waters. Higher volatility and a powerful momentum and trend, provides the opportunity for the bigger profits to be collected; but picking the right candles can also lead to interesting results, even when the moves are not that big.
