Recognizing the signals as they are creating a pattern improves the probabilities of being in a correct trade. Correctly applying moving averages provides another indicator for improving the correct trade ratio. Candlestick analysis is not merely the recognition of individual signals, it is having the ability to recognize the other indications that a bottom or a top may be in progress. Candlestick analysis also allows an investor to plan a trade. What should result for the confirmation of a buy signal? Where is the correct level to place a stop loss? What other indicator confirmations reveal whether the next price move will be inordinately strong? These are all aspects of investment logic built into a graphic candlestick charts.

Note how the CSUN chart set up with a multiple number of bullish indications. A flat trading area involving small candlestick signals in the oversold stochastics area created the environment for a potential reversal. A bullish candle moving up through the T-line indicated a bullish breakout of a resistance level. The bullish candle also created a Cradle type pattern. The cradle pattern might not have been the purest form of a Cradle pattern. However, adding all the other indicators to the analysis provides a much clearer visual alert that a trend reversal may be in progress. The tee line became a very viable support level after it was breached.

CSUN

Can a 22% price move be anticipated after every bullish candlestick signal? Obviously not! But having the capability to visually recognize and analyze when a reversal should have occurred, the prospects of participating in potentially big price moves is extremely improved, especially  when following what the candlestick signals are revealing. The most important element of candlestick signals is the simplicity of their applications. Once you have learned why the signals have been created, the ability to correctly analyze trends are dramatically improved.

The Dow moved from the oversold condition towards the overbought condition in just a matter of days. As seen on the chart, the Dow has showed weakness over the past couple days of trading. A Shooting Star/Spinning Top formation on Friday indicated that profit taking might be coming into the market. That was confirmed on Monday with a bearish harami. Another advantage that candlestick analysis provides is not only reveal in where a reversal might occur, but the extrapolation of the signals and other indicators provide logical targets for the next price move. In the case of the Dow, it would not be unexpected to see prices pullback to test the tee line.

DOW

The strength of a signal, the condition of the stochastics, and the location of moving averages or trend lines can make for logical trend or intermediate trend targets. That does not necessarily mean that all targets will be achieved. Projecting where the next trend 'could' move to is a quick visual analysis of all the indicators that might come into play. The reversal signals remain the predominant indicator. If a moving average or a trend line is the projected next target, and a reversal signal occurs prior to reaching that target, the signal reveals the important information. There has been a change of investor sentiment before the projected target was reached.

On the other hand, witnessing a trend where a non-reversal candlestick formation occurs going through the projected target reveals different information. The projected target may not be acting as resistance. Candlestick investors have a great advantage. They can analyze very quickly what investor sentiment is doing at levels where other investors are watching for an expected result. Use this information to your advantage. It is not difficult analysis.

Candlestick Forum Holiday Specials - Please check the homepage for the holiday specials. The end of the year becomes a very good time to study investment strategies. Of course, we, at the Candlestick Forum consider candlestick signals as the ultimate form of technical analysis. The discounted prices will entice all those that are sincere about improving their investment abilities for the future.

Online training program -The current eight-week online training program has been resulting in very good feedback from the participants. Mastering candlestick analysis becomes greatly improved when it is taught in a well structured program. Each of the Wednesday night training sessions has been jam-packed full of valuable information. The next training program is now scheduled for the weekend of January 19th and 20th. Both Stephen Bigalow and Rick Saddler will provide their insights and their hands-on experience in a two day training session. Details of this training session will be available in the next few days. Clear your calendars, if you have not taken trading instructions from either Mr. Bigalow or Mr. Saddler, do not miss the opportunity to gain valuable knowledge on how to analyze candlestick investing.

Chat session - Chat session tonight at 8 p.m. ET for members. Mark your calendars! Thursday, December 13, Rick Saddler will be hosting the chat session. The information Rick will be providing is another successful indicator technique that he utilizes for pulling profits out of the market on a consistent basis. Do not miss this opportunity to learn another technique that may help you create thousands of dollars in profits from your trading.