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Trading with Japanese Candlesticks

Successful stock trading need not be excessively complicated or difficult. Trading with Japanese Candlesticks allows traders to avoid the use of complicated formulas, ratios, and intricate strategies in trading stocks. In stock trading with Japanese Candlesticks the trader will learn to use highly accurate patterns that are easy to recognize. Candlestick patterns predict changes in pricing and investor sentiment. Candlestick analysis has been around for hundreds of years, having gotten its start from Japanese rice traders when there were still Samurai in feudal Japan. Trading with Japanese Candlesticks is certainly not limited to trading commodities such as rice but can be used on stocks, options trading, futures trading, and trading Forex.

In trading with Japanese Candlesticks each signal is a symbol that carries information about the highs and lows of stock prices. Besides being accurate and reliable, Candlestick signals are easy to recognize and easy to understand. In a combination of a time line and stock price chart Candlestick charting displays the opening and closing stock prices in a vertical bar similar to a candle. This is the body. It displays the high of the day as a wick extending upwards from the candle and the low of the day as a wick extending downward from the body of the candle. These are the upper and lower shadows. The length of the body and the two shadows are proportional to the changes of the stock price during the trading day. The body of the candle is white if the stock closed above its opening stock price and black if it closed below the opening price. In trading with Japanese Candlesticks the trader starts by learning to recognize each of the dozen basic Candlestick chart formations. These are the Doji, Gravestone Doji, Long-legged Doji, Bullish Engulfing Pattern, Bearish Engulfing Pattern, Dark Cloud Cover, Piercing Pattern, Hammer, Hanging Man, Morning Star, Evening Star, and Shooting Star.

Trading with Japanese Candlesticks is to use technical analysis. Technical analysis works because market prices repeat themselves over time. By recognizing the beginning of a price pattern the trader can predict the outcome. This is what Candlestick chart patterns do. Technical traders know that the market immediately discounts the fundamentals. By focusing on stock price patterns as interpreted by Candlestick signals a trader can get a clear view of the future of a stock price without a lot of heavy mathematics or complicated charts. A Doji Candlestick, for example, is a signal in which a stock price closes right at or very close to the opening price. The body of the candle is very short. This is a clear and easy to read sign indicating market indecision. The lengths of the shadows or wicks are an indication of the degree of indecision. In upward market trends a Doji can be an indication of a pending correction. In a downward trending market it can be sign that sellers are losing conviction and that a market reversal and price recovery are pending.

In trading with Japanese Candlesticks the trader will want to learn about the Doji and the rest of the basic twelve Candlestick signals as well as Candlestick charting techniques. He will also want to learn from the experience of others. For example, Candlestick Forum offers online classes. By signing up as a member of the Candlestick Forum traders can follow Steve’s stock picks and learn about buying at the bottom, gap analysis, and other aspects of profitable trading with Japanese Candlesticks.


Market Direction: Is there investment emotions involved with daily investment decisions? Definitely! Even for the most seasoned investors, there is always an element of having to control emotions. Controlling emotions is usually resolved by many years of experience. However, today's investors do not have to go through years of hard knocks to get their emotions under control. Seasoned investors maintain their discipline by adhering to the rules they have applied to the patterns and confirming indicators. The truisms that are built into candlestick analysis will produce a valuable trading platform that greatly diminishes decisions based upon emotions.

Once again, the markets have shown a good steady solid uptrending day. The operative phrase in this previous statement is, "once again". Let the market tell you what the market is doing. Currently the uptrend has been slow and steady with consistent opportunities for profit-taking. These type of market conditions provide a much more solid and lasting uptrend. There is no exuberance in the current buying which could be followed by severe profit-taking.

DOW

However, most investors will experience anxiety even during a slow steady uptrend. That little devil starts talking in our heads. "What if this little pullback is the beginning of the big one?" We close out positions because of "fear". Fear that we might be in a position that because it showed a little bit of selling, was ready to head down further. This fear usually overrides all the reasoning for establishing the position in the first place. Some good examples are the TLB trade and the LNG trade.

TLB

Note the reasons for buying Talbert's TLB. When the stochastics were in the oversold condition, it formed a Cradle pattern. Until the dark candle this past Tuesday, it could not close below the T line. Even the close on Tuesday was close enough to the T line to say that it was closing on the T line. Tuesday's markets were down. But a couple things did not occur when the market was down. The indexes did not close below the T line. TLB closed right at the T line. This weakness is that because concern in the minds of many investors. The "what if's" start popping up. What if this is the beginning of a hard selloff? What if TLB is about the gap down big on a weak open tomorrow? No matter what each individual conjures up in their own minds, it is usually due to the current circumstances versus what has been occurring in the overall trend. No matter how dismal a current day may look, investor sentiment is still evaluated based upon the force it has moved through a reversal parameter or not moved through a reversal parameter.

Stay with the candlestick rules, and you will find yourself on the right side of a trade a high percentage of the time.

LNG

Candlestick Profits – Eliminating Emotions with Candlestick Analysis - Have you ever cried because of your trading? Have you ever yelled, "You are a stupid idiot" at yourself for making the same mistake over and over? This book is going to make you look at yourself in a completely different light. Just as "High Profit Candlestick Patterns" points out investment concepts that make you say "yeah, I knew that!", Candlestick Profits – Eliminating Emotions with Candlestick Analysis   will point out things that will make you say "yeah, why do I keep doing that?". Fortunately this book will identify investment flaws that most investors do and give them a viable solution on how to correct those flaws using candlestick analysis. This is not rocket science! This is merely changing how you think when you put on an investment trade. Correcting one minor flaw in your investing may be worth hundreds of thousands of dollars in the future.

But wait, there's more!

To make sure everybody reads the valuable information incorporated in this book, the Candlestick Forum is going to throw a carnival like promotion into the mix. One book is going to have a crisp $100 bill stock in the backend pages. Also, three additional books will have purchase-bonus coupons. This will probably create a massive hubbub throughout the investment community.

Chat session tonight at 8 PM ET. Everybody is welcome. Learn some of the techniques for keeping emotions out of your investing.

Good Investing,

The Candlestick Forum Team 


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Candlestick Profits - Eliminating Emotions With Candlestick Analysis

 

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