Get Ahead of the MarketWe all wish we had the proverbial crystal ball. We could see the future, get ahead of the market, buy stocks and sell stocks at optimal prices, and generally profit from trading stocks. The fact of the matter is that we donít need a magic crystal ball to predict stock prices. We donít even need magic. We have Candlestick analysis! The ďmagicĒ of Candlestick patterns has been around for centuries. It is based on the fact that stock price patterns and patterns in various markets repeat themselves. The old saying is that those who donít learn the lessons of history are doomed to repeat them. The corollary is that learning how stock price patterns repeat themselves allows us to get ahead of the market and make profits.
Stocks follow market trends, for example. At some point a trending market and an individual stock reach a moment of indecision. Investors may be looking at fundamental analysis of the stockís price to earnings ratio or reading that the economy is about to cool off and that inventories are going up. It makes little difference in technical stock trading using Candlestick pattern formations to get ahead of the market. The reason for the indecision is not as important as the fact that the sum of all trades for the day of all traders will often leave the closing stock price exactly at or near the opening price, despite sometimes large up and down fluctuations. When the trader uses Candlestick stock charts in this situation he will enter a Candlestick signal for the day that has a very short body, to the point of the body just being a line. The upward and downward wicks of the candle body, the shadows, can be fairly short indicating a small degree of market indecision or fairly long indicating a great degree of indecision. This a Doji Candlestick signal. It is an indicator or market indecision. In a flat market the Doji does not really help us get ahead of the market because it does not indicate which way the stock price will go. However, it is a good indicator of a market reversal or stock price reversal in a market that has been heading either up or down.
Both fundamental and technical analysis are useful as ways to get ahead of the market. Certainly the legwork of fundamental analysis can give us early information on a biotech or computer stock with a world changing product. Technical analysis is the mainstay of how to get ahead of the market in the short and medium term. Finding good advice can be the important as well in how to get ahead of the market. Good advice comes in the form of stock picks, stock training webinars, and the opportunity to chat with experts in trading stocks with Candlestick charting techniques. To be successful at trading stocks a trader must be in active stocks. It is the change in price of a stock caused by market volatility that creates profits. By staying connected to the experts in Candlestick signals at Candlestick Forum the trader can be in the right stock with the right skills at the right time in order to profit in stock trading.
Market Direction: There are candlestick sell signals starting to appear in this market. Both the Dow and the S&P 500 have shown Hanging Man signals for the past two days. The NASDAQ showed a Bearish Harami on Wednesday but Thursday's trading opened lower and showed strength going right into the close. This is now indicating some indecision. This type of market action requires having some short positions as well as long positions in the portfolio.
When the markets start getting into a doubtful mode, investors should be changing their strategy to accommodate the investor sentimenat is controlling the markets. This sometimes requires pulling out of the market completely. However, this obviously becomes a great deterrent to the income of investors that are making their living from the markets. The next best alternative is to restructure the trading strategy that would best be accommodated by these market conditions. This might involve searching for patterns that create profitable day trades. A day trader be and described as a trade that is established in the morning and closed out sometime during the same day. This would eliminate any market risk during overnight situations.
This trading strategy can be implemented fairly easily with candlestick analysis. Because each signal/formation is developed by investor sentiment, an investor can easily witness when investor sentiment is building up. The Candlestick Forum has identified a number of price pattern setups that result in high profit breakout moves. Being ready for these potential moves allows a candlestick investor to place funds upon see in the confirmation of a breakout.
The visual aspects of candlestick signals permits an investor to create trading strategies that accommodate their own trading styles into the current market conditions. This makes for the development of profitable trading techniques in spite of changing or on accommodating market conditions. Once you have learned the information conveyed in each individual candlestick signal or pattern, you can trade any market or any trading entity successfully.
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