How
to predict a stocks movement or to understand how likely a stock can move in
the next few hours based on just one single candle that is the first five
minute candle and i call it the single candle magic.
I’ll said you something that it is not a strategy
for you to trade based on the first five minute candle but it is for you to
understand whether you should trade in the next five minutes or even after that
or should you even consider this stock to trade, it is just a tip for you to
understand or to get an overall idea of that stocks volatility and the volume
that is being traded and the overall movement.
Case 1:
So
the time frame that you should be keeping is five minutes and you will be
checking the first five minute candle if you see these kind of candles as the
first five minute candle of any stock or any index that you are watching which
has a small body and a very large big, it
can be of any color it can be a green candle or red candle so if the candle body
size is very small compared to the wick that stock can be likely range bound or
flat for the next few hours or even minutes.
Case 2:
So
if you are seeing above picture that the first five minute candle is having a
very large body or even larger weeks then you can expect the stocks price movement
within this candle for the next few minutes that is it can be likely range bound
or flat for the next few candles you should always cross set the next five
minute candles to get the confirmation.
Case 3:
So
the first five minute candles are average sized or even a bit more than that or
even a bit larger than that but if it is having very less weeks or even no wicks,
these stocks can give a bullish or
bearish movement in the next few minutes but you should always cross check the
next five minute candle or even the next five minutes after that to get a
confirmation.
Case 4:
So
if you see that the opening five minute candle is having a very large week on
one side it means that this stock has a strong resistance or this stock price
is not able to go beyond this area and it is having good volatility so you can
understand one thing that after even if next candles reach in this area it can
bounce back from this level so it is different for different type of candles based
on the color of candle and it is also dependent on how the stock opens.
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