Teddy

An interesting trading pattern can be seen in the following stocks, every day is closed to form a Doji - see drawing attached. Can someone explain what is the logic there?

SEOAY
GDNNY
BCKBF
BAESY
PUBGY
WOSLY
RYCEY (Rolls-Royce plc (ADR)!!!).
And many more…

I mean, I can know the close price when the trade starts in the morning, so what is the catch here? How one does money out of this information?

Thanks, Teddy

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daniel_asimov

Teddy.

That's simply amazing.

I haven't seen something like it before. I do not know how to explain those continuous Dojis. Looking forward to learn more about them.

Thanks for sharing this info.

wasabi137

i don't understand what you guys are looking at please explain..i know what a doji is..

David Waring

Hi Teddy,

I didn't look at all of the charts of the stocks that you have listed above but the couple that I did look at were not listed securities but ones that trade over the counter.

Because of the small number of shares that are generally traded in instruments such as this many charting packages will simply update once a day, and display only the close along with the day's range.

I think this is most likely the reason why the chart is displaying this way.

Hope that helps. As always if there are any other questions or comments please feel free to post.

Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

David Waring

Hi Wasabi137,

Glad to hear from you.

If you look at the chart which Teddy has attached to his first post you will see that each of the candles in that chart displays the open and the close as the same level.

So, without knowing anything else, this would indicate that the open and the close for the instrument are always the same even though the day's range (as represented by the wicks of the candle) is not. So what Teddy is asking is how this could be, because this would indicate that a trader could make a risk free profit, knowing there the close was going to be at the end of the day (at the same price as the open).

For an explanation of why this happens see my post above. As always feel free to post if there are any other questions or comments.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

daniel_asimov

Hello David..

Thank you for your explanation.
I was also intrigued with the Dojis.
Over the counter securities.. I will keep that in mind and study more about them.

I mostly studied securities with high liquidity and heavy volume. So it was new to me to see these kinds of charts.

Have a good day!

-Daniel

Teddy

Dave, Thanks.
Now it makes perfect sense. Thanks for the clear explanations.
Have a great weekend.

Teddy