Bulls, Bears and Hogs
“Bulls make money, Bears make money, but Hogs get slaughtered”
Candlestick signals work exceptionally well at pin pointing trend reversals. They visually show the trader the internal dynamics of the market forces at that point in time. The phrase ‘at that point in time’ can be daily, weekly, monthly or even intra-day timeframes like 10 min, 15 min or 60 min. It just depends on what time frame chart you are looking at.
Most of the signals, however, require confirmation on the following day. If you see a Bullish harami in the oversold condition, it implies that the selling has probably stopped. However, for the new trend to begin, the bulls have to demonstrate buying force the following day. As a candlestick trader, you will buy only on confirmation of the signal. This will automatically mean that you will not be getting in at the lowest point of the downtrend. Similarly, when you sell on a confirmation of a sell signal, it will mean you are not selling at the topmost point of the uptrend. This is perfectly fine.
The goal of a candlestick trader is to always get the nice juicy part of the trend, whether it is in an uptrend or downtrend. The goal is never to time the exact bottom or the exact top. That is too difficult and not worth the effort. The middle chunk of the trade is very easy to profit from using candlestick signals. Some traders want to be perfectionist and try to time the exact bottoms and tops. This can many times lead to unnecessary stop losses and waste of time and energy. In other words, do not try to hog everything. That usually will end up costing you more than what you bargained for.