So i was looking at this stock when i saw that it reached new highs. The red bar is the bull candle blue being bears. I saw the bull red candle right before the big doji at the top form and it was on increasing volume, not to mention it broke the dyas high. So i brought it thinking it was going to go higher but it didnt. You can see the blue bar form after the doji and it sort of went down after. I just dont understand what i did wrong. I followed the textbook approach to this situation and it WTF!!! Can someone please tell me what i did wrong?
You have divergence on price highs and divergence on volume, I usually rather have a long swing from lows to the high on reduction of volume, so like now the ave swing in ES in the morning is 7.50 points from swing low to swing high before making a different trend, so if this pattern formed near 7.50 points, I'd wait till I saw reduction in volume, and kiss of death was the Doji in this pattern. Ok, I don't mean to insult, but where you bought were all the late comers to the party, and those who sell short came in hard to force price to come down. Now each market has an average of so many ticks, cents, pips past previous pivots to show weakness of trend or continuation of trend, not knowing the stock or what the average of breaking highs of last pivot high can also you are trading lost.
reduiction of volume on rising price is a good thing? I thought rising volume coupled with rising prices meant momentum and that was what to look for. NEways i held onto the stock thinking it was going to shoot back up. And it did! it broke into new highs again. I figured that since the price had broken the days high this small sell off was going to be taken over by the bulls again and i was right whew! But you mentioned divergence on price and volume. Can you elaborate on that? aND WHAT do you mean by 7.50 ES swing? Where is the ES thing that ur talking about?
I"m not sure you'll beat a coin flip trading candle stick signals, volume, and indicators. Next time you get something similar, just flip a coin.
The only thing that really matters is that you've been getting some consistent advice for some traders that recognize that you're not ready to be trading because you do not have a completed trading plan. Simply, you can follow the "textbook approach" every day and you will still consistently lose because you lack a complete trading plan. Therefore, to give you advice on what's wrong with this particular trade when you should not be trading right now will only be encouraging you to keep trading with your incomplete trading plan.
Your bull/bear candles are the opposite color of what they should be. On a serious note, no matter how beautiful the setup may be, no matter how perfectly all positive criteria are aligned, on any individual trade price can easily do total opposite of what happens more often than not over a series of similar trades.
You entered a crowded trade. The biggest volume spike on the chart is at the end of the initial move up, and is accompanied by a small candle- indicating that a lot of longs (future sellers) have potentially gotten trapped. For them to profit, a large number of buyers have to appear who are willing to enter at even higher prices. The low volume move out of consolidation confirmed to many of these longs that they were probably trapped, and they scratched their trades.