Trading Stocks Online
Trading Stocks Online with Japanese Candlesticks
Trading stocks online has become more and more popular with the advent of the internet. No longer do we have to wait to get in touch with a real live stock broker and instead can login and make trades based on real live data. Before we discuss how to trade stock online using Japanese Candlesticks, we will first take a look at the advantages to trading stocks online in the general sense.
As discussed above, we no longer have to wait to get in touch with a real live broker to place trades, but fees are also cheaper when going through a stock trading site instead. Online discount brokers are now available to due to the increased number of online trades placed each day. Discount brokers offer the services of a stock broker, without the fees. While discount brokers do not offer advice, like full-services brokers, they still ensure that your trades are placed quickly at a lower price. Lastly, another advantage to trading stocks online is that the internet provides more information than a stock broker could ever provide. The internet allows the investor to look up information quickly and place trades based on real live information. In addition, many stock trading sites have built in features to assist investors with finding information regarding specific stocks.
Japanese candlestick signals are in use by some of the world’s top traders in order to predict future price movements. Candlestick charts provide the same data as bar charts, however the data displayed on candlestick charts is said to be more visually appealing and offer more information regarding what is occurring in the markets. The main difference between bar charts and candlestick charts is that when looking at candlestick charts, the candle appears with a body in the area between the opening price and the closing price. When the closing price is lower than the opening price, the candle that appears is referred to as a black, red or solid candle. Conversely, the candle that occurs when the closing price is greater than the opening price is a white, green, or hollow candle. The doji candlestick is an important signal that candlestick traders often learn about first and this signal occurs when the opening and the closing prices are the same.
Another important factor when analyzing candlestick chart patterns is the size of the candlesticks. The size of the candlestick indicates to the investor the dominant market sentiment when trading stocks online. For example, a small white, green or hollow candle indicates to the investor that buying pressure is not very strong, whereas a long white candlestick indicates that buying pressure is strong.
There is a lot more to learn for investors interested in trading stock online using Japanese candlestick charting. Many investors prefer this method as opposed to using more basic charts such as the line chart, bar chart, or point and figure chart. Continue to learn about Japanese candlestick stock trading and see why some of the world’s greatest traders prefer this method.
Market Direction: Many investors, who are trading stocks online, often will jump the gun. They want to invest in something without having a program/format. This usually leads to a negative mental outlook, one that dramatically slows down the correct learning process. The great benefit of candlestick signals is the excellent visual format for when to buy and when to sell. Some very simple scanning techniques allows for identifying the high profit trades. Trading stocks online implies that each investor does not necessarily want to depend upon so-called professionals for their investment advice. This leaves the investor with a multitude of trading programs. Trading can be done with numerous technical indicators such as breakouts, Elliot wave movements, seasonality, trading stochastics, and many more. However, candlestick signals provide the most proven and objective form of technical analysis. The signals are created by the results of investor sentiment.
Applying candlestick signals to other trading techniques immediately improves an investor's returns. All trading methods are created by the reoccurring appearance of trading patterns. Prices move based upon investor behavior. The reoccurrence of price patterns is the direct result of typical investor sentiment. Utilizing the information from other technical training programs allows an investor to implement candlestick signals at the right conditions during a pattern. Seasonality is a very strong technical factor from year to year, month-to-month, even day to day. If you know the common rules of what specific stocks/sectors will do during specific times of the year, this allows an investor to be prepared for potentially high percentage moves. Applying candlestick analysis to those charts creates a very clear confirmation of whether a commonly known reoccurring price pattern is going to perform the same way during the next time frame.
The more information an investor can put into their mental arsenal, the better the probabilities of being in the right trade at the right time. This is not a difficult concept. If it is a common seasonality factor that the trucking stocks will move positive three months after the railroad stocks have started to rally. Simple logic suggests watching the trucking stocks for candlestick buy signals at the appropriate time. Utilizing candlestick signals eliminates having to put funds into a sector with the anticipation of a potential move. Those funds can be used elsewhere until candlestick buy signals reveal if and when buying is coming into a sector. This eliminates having to place funds in positions with the anticipation that a price move should occur but not 100% guaranteed that it will. Once the candlestick buy signals have appeared, the probabilities that the reoccurring seasonal factors are responding can visually be confirmed.
The signals represent changes in investor sentiment. Knowing what each signal illustrates allows for very fine tuned entry and exit strategies. The combination of some very simple moving averages allows an investor to know what to do when entering or exiting the trade with a high degree of probability. This knowledge dramatically reduces the emotional fupaws that most investors make. It dramatically reduces the second-guessing.
The DTG chart reveals a simple trading strategy potential. Note the Hanging Man signal created today. It is in the overbought condition, a good distance away from the tee line. Knowing what a Hanging Man represents, the decision of where and when to take profits becomes relatively simple. A lower open tomorrow would illustrate more profit-taking. That would be the time to watch for a pullback potentially to the tee line. Conversely, a positive open would have different ramifications. The uptrend is still in progress but some very simple stop loss procedures could be established to protect profits at this level.
The same techniques for showing high probability situations for getting out of a trade can be used to enter a high profit potential trade. SGEN is a chart that reveals signals occurring exactly at the appropriate time. A Morning Star signal, with the Doji day just touching the 50 day moving average, makes for a high probability trade. Once again, very simple entry strategies allow an investor to improve their correct trade ratio as well as establishing very simple stop loss points.
It does not take long for an investor to learn how to use the signals correctly. Just as the Japanese rice traders had observed when the signals work profitably over the past 400 years, you as an investor do not have to learn by mistakes. The few simple rules that pertain to each signal are very easy to understand. The Morning Star signal works extremely effectively in the oversold conditions at the end of a downtrend. As demonstrated in the SGEN chart, this makes for a high probability profitable trade. The Morning Star signal, witnessed at the end of a flat trading period, such as we are seeing in the Dow right now, also provides some valuable information.
After two months of flat trading in the Dow, the hard sell off of last Thursday breached the lower end of the trading channel. This was now a new dynamic in the market that had to be watched diligently. The fact that Friday's trading produced a Doji type day gave a better future outlook for what could possibly be expected in Monday's trading. A simple rule for a Doji is that the trend will usually move in the direction of how they open the trading following the Doji. The strong pre-market morning futures on Monday immediately revealed the downtrend should have stopped. The fact that the trading closed more than halfway up Thursday's trading candle now created a recognized Morning Star signal. This Morning Star signal has great implications for the market trend.
It does not take long to learn how to use candlestick signals effectively. Mark your calendars for September 20 and 21st for a two-day comprehensive candlestick trading program. In this 48 hour period, you will learn how to understand candlestick analysis in a very orderly manner. Steve Bigalow will demonstrate where candlestick signals work effectively and why they work effectively. When you understand "why" the signals work as they do, you will now have an understanding of how to trade just like the full-time professionals do. Additionally, Rick Saddler will demonstrate how he has applied other trading indicators to greatly improve day-trading abilities using candlestick signals. The combination of this information will put you in a position to where you can control your future returns without ever having to rely on anybody else's advice in the future. Click here for more details about the Candlestick Online training seminar.
Seasonality presentation - Thursday, September 11, 2008 the Candlestick Forum will be hosting Best Choice Software, the leading software program for seasonality research. Do not miss this presentation. The information they provide creates an excellent supply of trading probabilities that you will be able to utilize for the rest of your investment career. The immense amount of information incorporated into seasonality is simplified through Best Choice Software programs. Gain the advantage of knowing which stocks usually move when. This is an opportunity to gain valuable information for swing trading and long-term investing. Click here for information on how to join the Thursday night chat session.
The Candlestick Forum Team
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