How to Make Money Trading with Candlestick Charts

Bulls jumping in after Morning
Star signals in Matrix Laboratories
Point A in the chart also shows the trend
reversed with a Morning Star signal. What
stopped this up trend? The Shooting Stars
and the Bearish Engulfing signal.
Let us close our discussion of Morning Star

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signals with 
Figure 9.7
showing a chart of
Tata Steel.
Figure 9.7:
Tata Steel reversing after a
Morning Star signal
We can see a well defined Morning Star
signal form in mid-June 2006. Let us assume
as a trader you buy into the position. Where

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will you take profits?
As you can see from the chart, the correct
place to take profits was after Point 5. Let us
analyze why we should not have taken profits
earlier:
Point 1: 
A Dark Cloud signal is formed in
overbought conditions. What do you
want to see the next day?
Confirmation selling! In this case
there was none.
Point 2:
This is not a Bearish Harami. The
colour of the candles is opposite to
the definition of a Bearish Harami.
Point 3:
This shows another Dark Cloud
signal. The bears are really trying

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hard, but fail yet again to produce
confirmation selling.
Point 4:
This is a repeat of Point 3.
Point 5:
This shows a Bearish Harami in
overbought conditions. What happens
the next day? A gap down! As
mentioned before, a gap up or gap
down after a candlestick signal
formation indicates tremendous
strength in that particular direction. A
simple analysis of the situation would
have led you to take profits at this
time.

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Evening Star Signal
Description
Figure 9.8
shows an Evening Star signal
formation.
Figure 9.8: