股票期货突破技术分析(英文原版)-第10章
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ps and bottoms。
Although the setup series。are identical for both TD。Sequential and TD Aggressive Sequential； the countdown parison requirements。are different。 As。a result； the countdown pletions。are different for each。 This。would bee readily apparent were you to pare the location of the thirteen on the TD Aggressive Sequential chart with those for TD Sequential over the same period。 Note that TD Aggressive Sequential recorded a single thirteen top — in October 2005 — and a single thirteen bottom — in March 2006 — and that TD Sequential failed to record a thirteen price…exhaustion indication during the entire period。 That's。because the more liberal construction of TD Aggressive Sequential allows。for speedier countdowns； and the pletion of itsuntdown almost always。precedes。the pletion of conventional TD Sequential countdown。 Obviously； times。when both versions。of TD Sequential speak。simultaneously have greater import than when one occurs。without the other。 Nevertheless； expect to see the aggressive version if the conventional TD Sequential is。there。 In fact； count on seeing the aggressive version at or near the extreme price…exhaustion level； although the basic。version is。more likely to occur when the extreme exhaustion levels。are tested。
What to Do Next
Sufficiently often； markets。have responded to both perfected setups。as。well aspleted countdowns。to justify their use。 As。we discussed and demonstrated earlier； markets。usually react immediately to perfected setups。 The extent of the response depends on whether that setup has。exceeded the extreme level of the opposite setup—the TD Setup Trend （TDST） level in the other direction。 Figure 2。8 is。yet another chart of XAU showing declines。in August and October 2005 that held above the TDST lines。associated with the sell setups。begun in May and September 2005。 When the buy setups。fail to penetrate the sell setup TDST levels。such as。in these two instances； the declines。are usually pullbacks。within the context of an uptrend。 As。these two examples。illustrate； the market often supplies insight as。to when to expect the setup to be succeeded by a resumption of the prior move and a price reversal and when to expect the trend to continue。
When a countdown thirteen has。been recorded； some markets。respond immediately； whereas。others。meander in a trading range only to resume the prior trend。 How does。one distinguish between the two expectations？ Typically； if there is。no appreciable response to a thirteen within twelve price bars； the likelihood of a failure increases。 However； if then is a close above the close four price bars。earlier and additional price…range follow…through occurs。with next the price bar； the chance of a trend enhancesnsiderably。
Many will question the ability of TD bo to identify levels。of price exhaustion and consider it voodoo analysis。to try to do so； that is。their prerogative。 This。reaction is。not unexpected。 However； we believe that to dismiss。such a timing device is。a mistake they。make at their own peril。 This。approach is。intended to provide fundamentalists。and technicians。alike with a timing device and； if nothing else； an element of trading discipline。 Granted； the indicator is。by no means。a substitute for sound fundamental analysis。and trading experience； but it certainty is。a viable adjunct to a trading regimen。 Its beauty is。its。versatility and application globally to all markets and time periods。 Once fundamental screens。have identified attractive trading opportunities。and conventional technical analysis。hasnfirmed them； installing TD bo as。an overlay serves。to fine…tune trading activity。and ideally should enhance trading results。 If TD Sequential or other DeMark。Indicators； particularly short…term indicators； are introduced； you should be able to improve timing trading opportunities。even further。
CHAPTER 3
Charting With Candles and Clouds
NICOLE ELLIOTT。
Ten years。ago when I joined a Japanese bank。as。an experienced technical analyst； I arrived armed with my bar charts； now conveniently drawn by puters。and displayed on puter screens。 The traders。there asked me why I did not use candle charts； a tool they considered much more effective。 An English dealer kindly lent me hispy of Steve Nison's Beyond Candlesticks （Wiley & Sons； 1994）。 I read it surreptitiously； at home； and discovered what the more enlightened British； European； and U。S。 chartists。had already。seen。 Bars。and candles。are actually one and the same； what varies。slightly is。the display。format。 Candles。are clear； easy； and above all fast。 This。is。precisely what makes。them so superior。
Their advantages。are clear： speed； speed； speed。 I look。at between 200 and 400 charts。per day； so speed is。of the essence； dandles inform faster than bar charts； and they。also provide more detail and use more of the available information。
Candle Basics
First； a candle has。a skinny bit： high to low points。as in a bar； and a fat bit （the real body）： the difference between the opening price and the closing price。 In official markets it is easy to know exactly。at what price an instrument started trading。 In over…the…counter markets。it is。a lot more difficult； as。it is。with markets。that trade twenty…four hours。a day。 I tend to use the Wellington （New Zealand）/Tokyo opening prices。and the New York/Chicago closes。 If the opening is。above the close； the candle islored in—black。if you are using a pencil； any of fourteen different colors。if you are using the Bloomberg terminals GPC charts。 I like to use the 〃house colors〃 （which for us is。dark。blue） as。do many other professionals because it links。the research and the institution。 If the closing price is。above the open； the real body is。left white—based on white graph paper。
Second； as。the hours； days； and weeks。progress； the candles。change shape。 In the morning on the first of the month； the week； or at the top of the hour it can be very difficult to imagine how the candle might look。thirty days。later。 What may look extremely bullish at the start of the time frame can； of course； fizzle out into something inconclusive or even bee a reversal candle。
For example； prices。kick。off in the morning at X （a horizontal line）。 They then rally 2 percent； and the candle now has。a large white body and is。looking pretty bullish。 The market then collapses。in the afternoon by 2。5 percent； so you now have a long thin bit above a squat black。candle。 That produces。quite a different picture； a very bearish one。 The point is。to look。at the candles。at the end of the time period。 This。is。why； in ascending order； daily； weekly； monthly； and quarterly closes。above or below key chart levels。are important。 Imagine getting gung…ho with some share you tipped； earning brownie points。as。it breaks。to a new all…time high。 Then； by the end of the month the stocks。value retreats。to just below the point at which you bought it。 The candle would look like the one with bearish implications； which is。known as。an evening star or reverse hammer （picture a mallet）。 Think。again about thispany's。shares。 If you had remended it to colleagues； friends； and family； how would you feel？ Gutted probably； or at least disappointed。 And would you buy。more？ Probably not； as。your instinct would suggest sitting it out for a while to see if things。improve。
There is。one downside to candlesticks： their larger。size。 Each candle is。fatter than a bar； therefore they use more space on a page and； more important； more width on a puter screen。 This means you see less of the hourly； daily； weekly； or monthly data and therefore lose some of the footprints。and meanderings。of prior moves。 With markets。you fol…low closely； this。is。not too much of a problem as。you have the road map in your head。 With instruments。you look。at only occasionally； it can be trickier。
Reversal candles。are another substantial type of market indicator。 Important reversal candles have lovely names； including shooting star； bearish engulfing； three black crows； abandoned baby； and my favorite； hanging man。 The rest are mere foot soldiers。 Look。at the shapes。carefully and try to imagine what happened on that day or week； how…price action evolved over the period； the implications。for buyers。and sellers。and how they might be thinking at th
