Technical Stock Trading – Powerful Profits with Candlestick Signals
Technical stock trading is easily implemented with candlestick signals. They provide an immense advantage to investors when pin-pointing the best trades in the market. The implied logic, built-in to the signals, creates a platform for developing logical stock trading strategies. They always place the probabilities in the candlestick investor’s favor. The signals work extremely well on their own. Applying candlestick signals to easy-to-recognize trading patterns creates a platform for taking advantage of high profit moves.
Japanese rice traders became legendarily wealthy by using the signals. It allowed them to take advantage of ‘most’ investor’s basic human emotions when money was put on the line. Fear and greed becomes the predominant factors in most investment decisions. That is why large volume days are seen at the reversal points. This creates very simple technical stock trading strategies. The ‘panicked’ sell out at the bottom, the ‘exuberant’ buy at the top. The question should always arise, “ Who is buying the panic selling and who is selling when the world looks great?” Being aware that the candlestick signals exploit those emotions, an investor can quickly start taking advantage of the crowd’s known weaknesses. Having this asset as part of the investment arsenal, an investor can eliminate that weakness in your own investment decisions and make profits from having that knowledge. Capturing human emotions in a graphic depiction makes for a consistent way to extract profits from the market. This knowledge is easily learned when viewing the candlestick charts.
One of the most powerful patterns in candlestick technical stock trading is the Jay-hook pattern. A Jay-hook pattern (J-hook) is a variation of a wave 1 -- 2 -- 3 price move. It becomes an easy pattern to identify with the use of candlestick signals. A problem most investors have is understanding when to ‘sell’ after a price has made a strong move. The J-hook pattern demonstrates some easily identifiable attributes. First, it starts with a strong uptrend that you have usually produces “stronger than normal” returns in a very short period of time. This strong up move is significant enough to create the normal wave pattern, a reversal caused by profit taking, followed by a declining trajectory of the pullback, then the continuation of the uptrend rounding out of the bottom of the pullback, then starting a move back up thus forming a ?hook.?
This technical stock trading pattern provides the candlestick investor with some very simple stock market information and profitable applications. The first uptrend, which is usually a powerful move, will show clear candlestick ?sell? signals when the initial up-move comes to an end. The top will be formed with the stochastics ( or other trend indicators ) in the overbought area. Because of the strong initial uptrend, the first evidence of ?sell? signals should be acknowledged. Even if it is suspected that the uptrend could be forming a J-hook pattern, why risk remaining in the trade? When a ?sell? signal becomes evident, take your profits.
The benefit of candlestick technical stock trading signals once again can be applied if and when that recent high is tested. Witnessing another sell signal, as the price approaches the recent high trading level, would be a clear indication that the recent high was going to act as resistance. This would induce taking quick profits and getting back out of the trade. On the other hand, if strong signals are seen as the recent high is breached, that would be a clear indication the high was not going to act as a resistance level. A new leg of the trend may be in progress. Being prepared for the pattern and knowing what signals to look for, creates opportunities to participate in a profitable trend while greatly reducing risk