After, over 500 days of a series of lower highs and lower lows, Silver has printed a text book dragonfly doji on the 1 month chart.
This is a Bullish reversal candle when found at the bottom of a down trend but there are a few rules to a Dragonfly Doji:
✅ The candle closes & opens at or damn near the same price. Preferably at the exact same level, but it’s not 100% necessary.
✅ The lower wick (shadow) is very long.
✅ The upper wick is absent or close to non-existing.
Looking at chart, all 3 boxes are checked perfectly but thats not always enough. We need confluence in order to reduce false signals. Trading a candlestick pattern alone can give poor results to your trades. Dojis pair well with volatility indicators such as Bollinger Bands or the ADX DI, when reacting to support, moving averages and even FIB levels.
If you put the 50MA on the chart you will notice that sellers pushed the price down into market structure where it held, and price action wicked back above the 50MA to close as support. Silver also found support on the lower Bollinger Band.
On a side note, Silver had closed 12 of the last 14 weekly candles as red but also printed a MASSIVE Bullish Engulfing candle on the weekly.
If the next candle closes below the low of the Dragonfly, this invalidates the signal.
When using the Dragonfly Doji to trade, enter at the close of the candle for confirmation, look for the next resistance level to take profit and move your stop loss up as the trade grows.
As stated in a previous post, I do not trade paper metals, I simply use the charts to try and time better entires to stack physical metals. Which I did at 18.65 :)
With the state of the market and economy, Pm's may be in for quite the rally once the world is willing to admit we are in a recession. Im stoked on this pattern and cant wait to see how the August candle closes.
Do you trade or stack silver?
This is a Bullish reversal candle when found at the bottom of a down trend but there are a few rules to a Dragonfly Doji:
✅ The candle closes & opens at or damn near the same price. Preferably at the exact same level, but it’s not 100% necessary.
✅ The lower wick (shadow) is very long.
✅ The upper wick is absent or close to non-existing.
Looking at chart, all 3 boxes are checked perfectly but thats not always enough. We need confluence in order to reduce false signals. Trading a candlestick pattern alone can give poor results to your trades. Dojis pair well with volatility indicators such as Bollinger Bands or the ADX DI, when reacting to support, moving averages and even FIB levels.
If you put the 50MA on the chart you will notice that sellers pushed the price down into market structure where it held, and price action wicked back above the 50MA to close as support. Silver also found support on the lower Bollinger Band.
On a side note, Silver had closed 12 of the last 14 weekly candles as red but also printed a MASSIVE Bullish Engulfing candle on the weekly.
If the next candle closes below the low of the Dragonfly, this invalidates the signal.
When using the Dragonfly Doji to trade, enter at the close of the candle for confirmation, look for the next resistance level to take profit and move your stop loss up as the trade grows.
As stated in a previous post, I do not trade paper metals, I simply use the charts to try and time better entires to stack physical metals. Which I did at 18.65 :)
With the state of the market and economy, Pm's may be in for quite the rally once the world is willing to admit we are in a recession. Im stoked on this pattern and cant wait to see how the August candle closes.
Do you trade or stack silver?