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Best Trading Opportunity

What is the best trading opportunity today? Is it in trading Japanese stocks whose prices dropped after the earthquake and tsunami? Is the best trading opportunity in oil futures as political unrest and outright civil war take hold in the oil producing states across North Africa and the Middle East? Whatever the best trading opportunity is, it will be best exploited by those who do diligent fundamental analysis of the basic factors that drive stock prices and then apply technical analysis with tools such as Candlestick stock charts to predict changes in market sentiment. Finding the best trading opportunity requires research to spot depressed stocks, market volatility, and commodities whose prices are out of line with historical trends. Taking advantage of even the best trading opportunity means applying a well thought out trading strategy using tools such as Candlestick trading tactics. Finding opportunity in Japanese stocks will require a bit of research into just which companies will see a fall in profits due to the recent natural disaster, and why. Traders who have a firm grasp of the fundamentals of the situation will be able to use Candlestick analysis to spot opportunities as the economic aftermath of this terrible disaster unfolds.

To a degree the best trading opportunity for one trader may not be the best for another. For example, someone skilled in commodity trading and familiar with oil futures, gold futures, or corn futures will be able to take better advantage of opportunities in commodity markets than someone whose expertise lies more in trading oil stocks, gold stocks, and the stocks of agricultural conglomerates. Although traders in both arenas will use Candlestick patterns to guide their trading there is an advantage to being familiar with the market that can increase the likelihood of converting the best trading opportunity into the best profits of the year. Traders in several arenas may find that the best trading opportunity in each of their arenas results from the same set of factors. For example, the civil war in Libya threatens the oil supply. To the extent that unrest spreads throughout that part of the world it could threaten the passage of ships through the Persian Gulf and approaches to the Suez Canal. Thus those trading oil futures and oil stocks may see the same volatility as those Forex trading the Euro, British Pound, and Swiss franc to the degree that events threaten the economies of the European Union, Great Britain, and Switzerland.

Trading the Yen may present the best trading opportunity in Forex. The economic damage in Japan is on a grand scale, reconstruction efforts will likely last for years. The fact that many Japanese companies and individuals choose to repatriate offshore assets drove the Yen up so swiftly on Forex markets that the G7 economic ministers and several central banks threatened intervention in order to drive the Yen back down. There is a huge amount of money involved and that has the tendency to drive prices whether they are prices of stocks, stock options, commodities, futures, or foreign currencies.


Market Direction:The Doji provides numerous insights into the psychology of a price trend. The Doji signal creates a visual trade set up much more often than the other major signals. Understanding the ramifications of a Doji signal makes for many opportunities to profit both on a swing trade and a daytrading basis. The Japanese Rice traders say about the Doji that when ever you see a Doji one should take heed. Understanding that a Doji represents indecision permits a candlestick investor to take advantage of the simple rules that can be applied to a Doji.

The most basic rule for a Doji is that a trend will usually move in the direction of how the price opens after a Doji signal. This does not always indicate a trend reversal. In certain conditions, the appearance of a Doji would signify a temporary pullback in an uptrend. However, the majority of the time, how the price opens after a Doji can produce some significant high probability day trades. This signal alone can produce extremely high profits.

JEC

Understanding the psychology behind a Doji and witnessing it in specific areas of a trend makes the  procedures of when a price is about to move very easy to identify. Currently the Candlestick Forum is producing a training program specifically on the benefits of a Doji signal. Because we will be revising information that most members have already been exposed to in previous training videos, as well as additional characteristics that have been identified as high probability trades situations, a mini training session will be scheduled within the next few weeks. This training session will demonstrate all the areas where a Doji works most efficiently. This training session will be free to Candlestick Forum members.

The Dow showed a little weakness today while the NASDAQ maintained its strength. When the indexes are not completely in sync, that is an implication there has been no change of investor sentiment. Although the markets have now moved back up to the over bought condition, there is not yet a candlestick signal that would reveal the sellers are starting to take control.

DOW

NAS

In these market conditions, continue to hold positions that are in strong chart patterns. There are numerous Fry pan bottoms that are starting to break out very effectively. These become relatively safe positions due to the pattern acting more upon its own strength versus being influenced by the market direction. Investor sentiment still remains relatively bullish. This is evidence in the number of stocks that are still showing excessive strength on days when the market in general is lethargic.

Chat session tonight at 8 PM ET - we will discuss the correct analysis and procedure for what to do when stopped out of a position and then the price continues back up.

Good Investing,

The Candlestick Forum Team


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