“If it’s obvious, then it’s obviously wrong” –Joe Granville
Before I started trading stocks, I decided it would be a great idea to read some books first. I read multiple books on candlesticks and was fascinated. “Wow, all I have to do is find this bullish engulfing pattern on the chart, buy the stock, and once I see a doji, I sell at a huge profit!” Just saying the names bullish engulfing and doji made me sound like a god.
The doji candlestick occurs when the price of the day closes at or very near the opening price. If you take a look at the upper black rectangle, you can see multiple dojis. They can look like a plus sign, an upside down T, or a T.
The bullish engulfing pattern is in the other rectangle. Notice that the white candle completely “engulfs” the body of the red candle.
Read my post “Candlesticks” to learn more about Candlesticks (that was obvious, I hope)
Now, let’s go back to the story.
Before I put real money on the line, I needed to test this magic candlestick stuff. I pulled up a chart, and inserted some of my favorite ticker symbols like AAPL, GOOG, and FB. And then something strange happened …
Read “Confirmation Bias” to find out more
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