Comment on Single Candlestick patterns (Part 1)

Muthukumar Subramaniam commented on 28 Aug 2016, 09:07 PM

Hello Karthik, I have a question in section 5.3 – Bullish Marubuzo .

As I understand, the risk averse trader will buy the stock on end of the second day, of bullish marubuzo.

We have a statement in section 5.3 as “As per the ACC’s chart above, both the risk taker and the risk averse would have been profitable in their trades.”

From the graph of ACC, I could see that on the third day after bullish marubuzo formed, it is a red candle. If risk averse trader buys the stock on end of second day of bullish marubuzo, I think he would make a loss if he expects the stock to be bullish on the third day too (as the third day is a red candle.) Given this, how are we saying the risk averse trader would have been profitable? Please clarify. Thanks!

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