kiranrshinde

How to trade Dragonfly Candlestick ?

NSE:BANKNIFTY   NIFTY BANK
Hello Everyone,

I have tried my best to explain, How to trade Dragonfly Candlestick pattern ?
Here, most imp point to consider is the Confirmation Candle ... why?
1. Market opened Gap down and was in the down trend, which broke the major Support level of 35000.
2. Now, this broken Support level would act as Resistance Level when market tries to reverse taking support of Trend Line .
3. At the same time, there was a formation of Dragonfly Candlestick indicating a Bullish move, so we should not immediately enter into trade as soon as formation of Dragonfly or Bullish Candle ...Why ?
a. We have an immediate Resistance Level of 35000.
b. If we enter as soon after completion of Bullish candle (Dragonfly), then our Stop Loss would be too big ... which is not good.
c. Also, the Bullish movement is not confirmed yet, so we should wait for confirmation candle.
4. Here, we see Confirmation candle breaking the immediate Resistance level and closing at the 35000 level.
5. Now, if we take trade after Closing of confirmation candle then Most Imp is Stop becomes very small compared to previous entry and we can see our target is achieved.

I hope you all like my teaching.
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