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July 20th Market Wrap-Up

Although the markets are trading relatively flat today, this does not diminish the prospects for finding Strong candlestick trades. The simple scanning techniques of candlestick analysis provides a constant supply of inordinately strong trades. It is a simple numbers game. Out of 10,000 trading entities, candlestick scanning will find more strong bullish or bearish trade set ups than most investors will require. This provides an additional benefit. Not only will the candlestick investor have a supply of good trade set ups, they can cultivate which of those set ups are going to be the most strongest. Today's flat trading in the markets did not alter the bullish chart patterns in the major indexes. This produces a trading environment that allows the candlestick bullish patterns to perform with much greater probabilities because there is no evidence of bearish sentiment coming into the markets.

Knowing what each pattern is illustrating allows for the optimal entry points based upon the confirmation of the pattern, which may be further confirmed by individual candlestick signals that formed within the pattern, and watching for the confirmation of the pattern at technical levels that others are watching, such as a moving average or trend resistance level. When a pattern confirms at the same time it is breaching the resistance levels, the probabilities of a bullish trade becomes that much greater. The benefit of candlestick patterns is that they usually produce a much stronger price move than merely uptrending prices. This puts candlestick investors in situations where the probabilities are not only good in the sense they are in the right direction at the right time but also have the prospects of making very strong profits.




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Good Investing,

The Candlestick Forum Team


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