Investment Timing - Improving Your Results With Candlestick Trading
The phrase 'timing is everything' is absolutely true when committing to any stock market investing strategy. For our purposes, it may even be more true that 'investment timing is everything'. Politicians, actors, comedians, singers, and athletes all rely on timing as a key skill in their success. Putting yourself in the right place at the right time is a crucial part of the skill, or luck, of any kind of success.
So does investment timing success depend on luck? Well yes and no. Successful traders believe that you create your own luck if you put yourself out there, take risks, although calculated ones, and put yourself in situations where you can take advantage of investment timing opportunities.
As an example, a common piece of advice that is given today is 'get into property', and as a general rule it's sound advice. In general, property appreciates in value over time and delivers significantly better risk reward ratios than any savings program or bank can offer. However, investment timing can make or break the investment opportunity. Many people have haphazardly entered the property market at the wrong time and made very little; and in some cases ended up in negative equity. If you buy in a city or town that is rising, then you will normally make money from your long term investing calculations. If you buy in city where a factory lays off 1,000 employees, causing widespread unemployment, as soon as you enter the market - there is a good possibility that you could see very little growth, lose money, or wait a long time to see a return on your investment.
The best investment advice is to continually develop your investment timing skills and be able to recognize opportunities as soon as they arise. Think laterally, broaden your perspective, and learn how to predict how local and world events will shape things financially. Then take calculated risks based on those factors. If you can get comfortable with this new kind of thinking, then you will benefit from investment opportunities that others in the stock market community miss – and more importantly you will see them in time to get in early.
Market Direction: As indicated by the Bullish Harami right on the 20 day moving average last week, followed by a doji day coming back to test the 20 day moving average, and closing at the higher end of the trading range, produces the evidence of the 20 day moving average was going to act as support. A longer-term basis, what could have been a downtrend starting with an Evening Star signal was terminated. The uptrend, which could be seen in the trading channel, was becoming a higher probability.
What did today's trading demonstrate? The Dow formed an indecisive trading day near the top of the trading channel. It was not a Harami in that it opened slightly higher than yesterdays close. Has the potential of being a Hanging Man signal. How does this fit into your analysis? The top of the trading channel is very close, which could be potential resistance. The stochastics are still in an uptrend but appear to have some more upside potential. This would create the conditions for the Dow to butt along the top of the trading channel for the next day or so.