When markets move with greater volatility, big changes in investor sentiment, without any particular trading format, an investor is just shooting from the hip. The appearance of candlestick signals at least provides probability factors for what 'should' occur next. The Inverted Hammer signals at the bottom of the Dow and Nasdaq trend provided some simple trading strategies. What should be expected to occur if a successful Inverted Hammer signal appears? What should not occur the next day when an Inverted Hammer signal appears? Recognizing a major reversal signal is the initial step for identifying when positions should be reestablished. Understanding the information provided by the signal also makes the confirmation of the reversal easy to identify. Additionally, the candlestick signal's simple rules also helps establish commonsense stop loss processes.

NAS

Did the markets hit bottom a few days after the big sell off or is this a bounce? Most investors do not have the opportunity or ability to recognize the reversal let alone ask whether or it's a bounce or a full-scale reversal. The candlestick investor at least has that projection. That becomes the opportunity to make profits in either case. Does it matter whether the up move is a bounce? Not if the reversal signals and high probability patterns can be identified and identified early. The swing trader can make the short term trades that can produce 10%, 20%, 30% or greater while the bounce is occurring. The longer term trader can participate in the bounce/uptrend, being prepared to close positions based upon seeing sell signals at the end of the bounce. Or if a new uptrend is starting, the other analysis' of trends, using candlesticks, can be put into effect.

The ability to recognize the potential end of a reversal of a strong pullback in the markets also provides the impetus to start searching for patterns in individual stocks. The Jay-hook pattern has produced some very good profits in the last week of trading. The Jay-hook pattern gets additional strength from the fact that the market in general is moving up, whether a bounce or a reversal. As can be seen in the JSDA chart, the set up of the Jay-hook pattern has produced very strong profits.

JSDA

Will all Jay-hook patterns produce a 50% profit in one week? No, but the formation of a Jay-hook pattern presents the opportunity to be in a position that can produce 50% profits. This pattern becomes a very logical pattern to recognize during these market conditions. What is the prerequisite for any Jay-hook pattern? A strong price move before the pullback. A strong price move as a result of inordinate buying interest. The Jay-hook is the result of profit taking after the strong price move.

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XXIA

If the profit taking is occurring in conjunction with a profit-taking of the markets in general, then the probabilities of continued strength in that price trend is extremely high when a profit-taking is over in the markets in general.

Use the common sense information built into candlestick analysis. Once you have learned it, it will benefit your investing for the rest your life, whether trading stocks, options, commodities, or any other trading entity. The Houston candlestick training seminar will walk investors through the step-by-step thought process that makes candlestick signals extremely profitable. Most investors know what the professed successful investment techniques are. Candlestick analysis merely points that information into a very easy-to-use, unemotional practice.