Five years ago I accompanied a family friend to COL Financial to attend one of their seminars. We met at Megamall at nilakad na lang namin pa PSE center. Pagdating namin sa mismong room we were handed out a folder containing topics to be discussed. I don’t do well on seminars especially Technical Analysis kasi I usually can’t contain myself if I hear someone teach something na I’m very sure hindi tama. The moment I saw the presentation I know sooner or later i would stupidly raise my hand and ask a question that would make the speaker awkward. I needed to go out of the room and have a “mini conversation” with myself sa restroom. “Don’t say anything. Doesn’tt say anything. Don’t say anything. No matter what you hear don’t say anything!” I got back, flashed a smile and listened sa speaker. Well, the guy talking seems to know what he is talking about. It was fun but one thing he said bothered me a little bit. I did not say a thing right there but I feel like i should’ve at least politely said something. The family friend whom i was accompanying ay nagmula pa sa Canada and was here for vacation. Interested lang siya mag open ng Trading Account kaya ako sumama. We went to a lot of brokers/firm that week. Medyu maingat kasi sa pera at gusto kumuha muna details bago mag open ng account. She did opened three accounts on three different brokers. Going back sa story. What bothered me was this statement of the speaker. “When plotting a support, always use the body of the candle. Stay away from wicks. Kaya nga wick eh kasi weak yan”.
I did not disagree with the speaker. I believe he has a point na if you plot anything ke FIBO man yan or SAR (support and resistance) mas ok if sa body ng candle. It has nothing to do with the wick being weak but kasi when you use the body instead of the wick.
It simply means you are using the closing price. Ok para mas maintindihan let me show you. (If you are new to my blogsite or you are a newbie sa trading please read this two blogs first bago mag proceed:
As discussed previously sa past blog post ko, A candle is a representation of a stock price.
May body ang candle at meron ding wick or isa pang tawag nila is shadow. If green ang color it means nag open ang stock price sa baba or sa mababang price at nagclose sa taas o sa mataas na price. If red naman meaning nun nag open sa taas o sa mataas na price at nagclose sa mababa na price. Mula sa price kung saan nag open ang stock hanggang kung saan ito nagclose ang tawag dun is body. Mula naman sa body pataas papuntang high or pababa papuntang low ang tawag is wick or shadow.
Bakit may ganun? Sample, nag open ang stock sa 100 pesos. Sabihin nating stock A ang name ng stock. At opening hour which is 9:30 AM sa Pilipinas nagbukas si stock A sa price na 100 pesos. After 30 minutes mas dumami nagbenta kaya bumagsak ito sa 98 pesos. Mga bandang 1:45 PM naman mas dumami bumili kaya tumaas ito umabot hanggang 105 pesos. nung magclose na ang market ang final price niya is 103 pesos. Green ang kinalabsan kasi nag open siya sa baba which is 100 at nagclose siya sa taas which is 103. mula opening price na 100 papuntang closing price na 103 is what we call body. Mula opening price papuntang lowest price of that day is called lower wick or shadow. Mula naman closing price papuntang highest price of that day is also called upper wick or shadow.
What really is a wick? What does it represent? You can’t just say basta wick ay weak. That’s being ignorant. A wick indicates where the price of a stock has fluctuated relative to the opening and closing prices. Pinapakita ni wick kung hanggang saan umabot ang price. Gaano ka taas or kababa inabot ng price sa araw na yun.
Sa stock market may buyers at may sellers. Sila or actions nila nagdedecide kung anong candle ang mafoform. Kapag sobrang haba ng upper wick meaning nun kahit anong bili ng mga buyers sa taas para tumaas ang price eh mas marami pa rin sellers kaya napupush pa din sa baba ang price. Kapag naman mahaba ang lower wick meaning nun kahit anong tulak or benta ng sellers sa mababa na prie ay natutulak pa rin ng buyer pataas ang price. In short, long upper wick sellers nagwagi while long lower wick buyers nagwagi. I’m not talking about any candle pattern. I will do a blog about candle patterns sa near future but for now paunti unti lang para makahabol ng newbies.
Paano naman kapag nag open ang price sa 20 pesos, bumaba sa 19.5 pesos by 10:30 AM , umakyat sa 20.5 pesos by 2:30 PM at nagclose sa 20 pesos? Tawag naman dun is doji.
What does doji represent. Doji represents uncertainty. Hindi winner ang buyers at hindi rin winner ang sellers. Tabla lang sila. Tinulak ng sellers pababa ang price tinulak naman ng buyers pataas ang price. Nagtulakan sila pero nagclose lang sa same price halos ang stock.
Maraming uri ng doji.
Wick is not weak. It actually tells you more of what happened sa price with regards to buyer’s and seller’s decision during that day. I will teach you how to draw all kinds of support and resistance but i want you to know the reason why sa body ako nagpplot ng linya when it comes to support or resistance. If you pay close attention sa mga sinulat ko sa taas you already know what im about o say.
Opening price at closing price are the start and end of the battle. Wicks shows you how far up or down the battle reached. Sa closing ako nagpaplot ng line dahil yan naang final say ng buyers at traders that day. Buyers migh push the price sa sobrang taas sa umaga pero pagdating ng hapon sellers migh push it back down. If you plot sa wick you are actually just considering yung part lang ng araw na yun. Sample, sa lower wick ka nagplot ng fibo or ng support. Sa araw nayun mula 9:30 to 11 AM tinulak ng sellers ang price mula sa opening kunyare na 40 pesos hanggang 37 pesos. Around 2:00 PM dumami buyers at natulak nila pataas ang price. Nagclose ang stock sa 41 pesos. If sa end ng wick ka magplot ng line as support meaning nun you only considered the part of the day between 9:30 AM to 11 AM and not the whole day. That does not paint the whole picture or the whole story.
The next time someone say Wick is Weak just smile for you know better.
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