How to Make Money Trading with Candlestick Charts

Stop out level for a Piercing
signal
The bottom of the bullish candle! It then
makes logical sense to put your stop loss just
below (typically 0.1% below) this price
point. The piercing signal is considered

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negated if prices come back down through
this point.

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Bullish Harami
In the case of a Bullish Harami, the logical
point to set the stop loss is just below the
bottom of the bullish candle as shown in
Figure 11.5
. The bulls had assumed control
at that point and should not be letting the
price slip below that.
Figure 11.5:
Stop out level for a Bullish
Harami signal

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Morning Star Signal
Figure 11.6
shows a Morning Star stop loss
scenario.
Figure 11.6:
Stop out level for a Morning
Star signal
As long as the price does not trade below the
low of the signal formation, the bulls are still
in control. The Morning Star signal is very
powerful and rarely will one fail. But a

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trader should be aware of the stop loss
setting just in case it were to happen.

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Hanging Man Signal
As shown in 
Figure 11.7
, the top of the
Hanging Man signal is considered resistance.
This is because the bears had seized control
from the bulls at that price. If the bulls can
take the price above the body of the Hanging
Man, the signal is considered failed.
Figure 11.7:
Stop out level for a Hanging
Man signal

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Shooting Star Signal
Figure 11.8
shows the stop loss setting for a
Shooting Star.
Figure 11.8: