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Author: Sprocket318 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 211  
Subject: Reading Candlesticks Date: 5/1/2004 3:56 PM
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Hi everybody,
I just signed up to the fool a few days ago. Don't leave to yahoo. Don't be traitors... It's okay. Business is business. If you have to go, then go (traitors). Anyhow, I read a book on candlesticks last thursday. It was Mr. Bigalow. The only reason I read it was for entertainment purposes. I'm still skeptical but I think it has SOME validity to it. My bible is Graham and Dodd's Security Analysis, but I figure a dabbling in candlesticks COULDN'T hurt. One may think these two ideas are completely unrelated. I am arguing that they can be effective if used together.
Graham and Dodd were always trying to value a company and buy it at a discount price. After finding a company at discount, they would buy it and HOLD IT until the intrinsic value is met. I argue that they could have maximized their earnings if they rode the stocks only on the ups (of course this is risky, but this is all theoretical anyway). Graham and Dodd knew the stock was going to go up, but they rode the ups and downs through until the target price was met. Check this out...

In theory, if you buy a stock at discounted value, you cannot lose. If you also use candlesticks, you may lose, but overall you will always win. The only number that will really be effected is HOW MUCH YOU WIN.
Yes, im crazy, but whatever. If I'm not mistaken, Bigalow believes you can buy any company (good or bad) and still profit using candlesticks. This may be so... but if you use candlesticks on GOOD companies, I think your average return HAS to be HIGHER. A good company WILL go up. Candlesticks will just amplify the return.

So there you have it. I'm crazy. We can start a new group called the neo-candlestick traders.

Who's with me,
Sprocket

P.S. I was just kidding about the traitor comments. Okay... only kinda kidding.
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