The method uses candlestick pattern and the relationship between the highs and lows of the price bar to determine entry points.
1. Price made 3 or more consecutive lower highs
2. Price made 3 or more consecutive lower lows
3. Price made 3 or more consecutive black candle (closing price is less than opening price)
4. When conditions (1) to (3) are met, enter a long position at the high of the previous bar.
1. Exit after holding the trade for 5 days.
Example of such a price pattern is shown below:
Lets apply this method to Digi.com Bhd (Symbol: 6947). Using data from 2003 to 9 May 2008, we have the following trades:
|Entry Date||Entry Price||Exit Date||Exit Price||% Change||Bars Held|