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Be a Profitable Trader

There are lots of suggestions as to how to be a profitable trader. That is because there is no one single answer for how to be a profitable trader. Profitable stock trading, options trading, or futures trading all require knowledge, skill and application. Traders need to learn how the stock market works, how to do fundamental and technical analysis of stocks, how to trade stocks online, and how to manage investment risk. The skillful use of Candlestick analysis will help one be a profitable trader. Taking online training webinars in stocks will be a good place to start learning Candlestick basics and the principles of technical analysis.

The knowledge needed to be a profitable trader is generally available and only requires that the trader take the time to learn and seek out seasoned traders for advice and counsel when needed. Starting out with basic stock market training is important. The class itself will be informative but the greater value may lie in the ability to ask questions and get live answers for seasoned professionals. In addition a knowledgeable trader who offers an online training course will often be available for online coaching as well. This can be a valuable “hands on” experience when trading live. In learning the basics of Candlestick pattern formations practical and live experience may often be more valuable than trying to memorize the visual signals of Candlestick patterns or other technical analysis tools without the stimulus of live trading.

To be a profitable stock trader requires that stock traders continually work on trading skills. This can entail learning new information about stock trading charts, keeping abreast in the latest in stock trading software, and continually updating stock trading strategies. Successful traders continually review their trades, both successful and not so successful. The old saying is that the best learned lessons come from our mistakes. The trader who honestly appraises his trading results will be able to improve on good trades and reduce the number of bad trades in order to be a profitable trader.

You cannot place in the hundred yard dash if you are not at the starting line when the starter’s gun goes off. Likewise to be a profitable trader you need to work at picking stocks to trade, picking market sectors with trading possibilities, and being at the trade station during market hours. It is possible to trade stock online both during market hours and after hours. Knowing the differences in how to trade during market hours with high volume and liquidity is different than knowing how to trade in the often sparsely populated and news driven world of after hours trading. Whichever market the trader wants to trade to be a profitable trader he will need to learn the idiosyncrasies of that market, how to apply both fundamental analysis and technical analysis of stock with Candlestick charting, and when to sit out a trade when the signals are not clear. Sometimes the hardest lesson of all is when to admit that you need more clarity, more research, and more skill. There are times when to be a profitable trader is to trade less but to trade more wisely.


Market Direction: Trend analysis is an extremely important aspect of successful investing. It is more than just analyzing whether the market is going up or down. That is just one fact for utilizing successful trend analysis techniques. Candlestick analysis provides a very clear visual analytical tool for evaluating what the major indexes will be doing. Candlestick analysis provides a highly accurate assessment because of the information built into each individual candlestick formation. Add that information with the utilization of the T-line, an investor can use that information to make inordinate profits during a price trend.

DOW

All boats will rise in a rising market. The candlestick investor has the advantage of being able to visually anticipate when a high profit pattern is developing. Knowing that the market trend is moving in a specific direction allows for exploiting the "high profit" moves coming out of patterns. This process dramatically improves the rate of return that can be made when knowing the market trend is either positive or negative. Friday's trading clearly demonstrated the tee line was continuing to act as support. Any established short positions could be immediately covered. Adding long positions to the portfolio could be done with relatively good confidence based upon establishing positions where the patterns could be identified. What is the risk of investing in new long positions when the markets are in the overbought conditions? Obviously, establishing new positions that may immediately have to be closed upon witnessing the markets starting to show a bearish reversal.

Price patterns work very effectively for two reasons. They can be bought as the overall market trend continues in an overbought condition. The lack of wild volatility to the downside in the general market trend allows investor sentiment to keep building up in a pattern. As illustrated in the TSYS chart, note how the trajectory of the uptrending frypan bottom has been contrary to the direction of the market in general over the past week. The patterns have investor sentiment buildup that will create a much stronger price trend result in an average bullish price trend. The second benefit they produce is a continuation potential of the pattern in spite of what the general market direction is doing. This remains true unless a market reversal occurs that is extremely substantial.

TSYS

These benefits help investors trade with a more relaxed demeanor. The fear of having sharp losses, when the market turns, is greatly diminished. The inherent forces Incorporated into price moves after a candlestick signal or pattern is witnessed is usually not as affected by what the overall market direction is doing.

Chat session tonight at 8 PM ET.

Good Investing,

The Candlestick Forum Team


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