Trading the Gravestone Doji -- with David Moadel candlestick pattern candle candles strategy
hello and welcome to looking at the markets with David Modell trading the
gravestone doji candlestick it is not that complicated but I just want you to
be aware I don't want you to trade something just because I told you about
it I want you to make your own decisions and don't just short or sell just
because you see a gravestone doji candlestick okay you want to use your
common sense and use small position sizes always respect your stop losses
and play it safe all right safety first folks but first what is the gravestone
doji it is a candle and it looks like this basically it's a doji because it's
based the body is basically almost non-existent it's flat it's a flat body
meaning for that period and this applies to any time frame of Candlestick all
right this could be a 1-minute candlestick or 5-minute or one hour or
one day whatever it is okay it's still a gravestone doji regardless of the the
time frame here okay so yeah when you have a flat body for the candle where it
opened and closed at around the same price all right but then on the other
hand look at the wick you only have an upper wick no lower wick okay so that
means that the price action started here it opened here and then when all the way
up here and so the market tried to push the price up but then it fell down down
down totally it got up here but then it totally failed all right and came right
back and closed right at about where it opened and so you had buyers coming in
and then the sellers came in and pushed it right back down so this up move
pretty much failed okay granted it did not close any lower than it opened but
still this is considered a failed attempt at an up move and when it
happens at the end of an uptrend in candle so you got uptrend candles up up
up and then you got your gravestone doji candle
okay and this says if you see this candle especially at the end of an
uptrend okay it's not as meaningful when it's and you know if there's a downtrend
or it's just kind of chopping sideways mainly this is useful or the most useful
at least in my opinion at the end of an uptrend okay so if you see this pattern
here you might consider selling gravestone doji okay it's possibly bad
news now don't follow this exactly this does not work 100% of the time okay I
want you to use other indicators use your common sense make your own you know
make your own decisions all right so just because I'm I'm saying sell doesn't
mean you should do it and some people actually short here they take a short
position but that's risky okay what you can do if you're a long only kind of
trader which is a safer way to go if you have a nice profit here you can you can
take profits here or start taking profits here not a bad idea because this
signals a failed up move and it could be exhaustion after a big uptrend okay so
don't follow this exactly you know use other rules use other indicators use
your common sense but if you wanted to trade it let's say you want it to short
it okay one way to play it is just to sell your long position take your
profits but what if you wanted to short it you could be careful though shorting
is very risky it's not for most people but if you want to try it the okay that
almost non-existant body there of that gravestone doji at the end of an uptrend
that could be called the trigger line okay and so you can draw a horizontal
line here and then wait until you get a red candle that closes below that
trigger line there okay you're drawing that trigger line right at that that
body which almost doesn't even it doesn't even exist here almost okay when
it clearly closes below it and it's a red candle that could be your short
signal and if you wanted to be safe which I mend you can use a stop loss and
you can place it just draw a horizontal line at approximately the top of that
upper wick there of that gravestone doji okay
and then you can hopefully follow it as it goes down and if it doesn't then at
least you know where your stop-loss is okay and if you want to make it a
trailing stop you can do that you can take profits along the way and so you
know about equidistant whatever this distance is you can draw another
horizontal line here that same distance and then another horizontal line here
the same distance and you can trail your stop-loss manually that way and so if
you took a short position after this candle closed below that trigger line
okay now you put you put your stop-loss here if you want to okay and then if it
breaks below the next take profit okay then you could take this stop-loss line
and move it down to here so now you moved everything down a notch so to
speak okay and so now your next profit target is over here and so your
stop-loss is here now and so on so you're trailing the stop-loss downward
you try it you're trailing your take profit and your stop-loss so to speak
okay that's one way to possibly do it this is complex though this is not for
most people so be careful if you're gonna short if you're going to go along
only then you could always just you take profits here and there's nothing wrong
with that okay or take partial profits start to think about is this going to be
the turnaround point all right all right so there's your gravestone doji and a
couple different ways to look at it and play it all right I hope this was
helpful to you if you want more help with trading or investing I do offer
coaching you can email me for the coaching at David Modell at gmail.com if
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a lot I appreciate it I'll talk to you again soon