Online Stock Market Trading Using Japanese Candlesticks
Because of the progress that we have achieved on the internet, in addition to banking, dating, shopping and bill-paying, we can even participate in online stock market trading. Whenever they want to, traders now have the ability to look at their accounts online, and brokers have the ability to process orders with internet stock trading, instead of the telephone.
Before online stock market trading was an option, whenever we wanted to sell or buy stocks we would have to call up our broker to make a trade. Now we are able to log into our stock market online investing accounts and trade stocks, bonds, currencies, and options at will.
Many brokerage houses and brokers now offer online stock market trading as an option to the stock market community. Another advantage is that the commissions and fees are often a lot lower. While online stock market trading has it's pros, as usual there are cons as well.
If you are a beginner investing in the stock market, the ability to speak to your broker can be very beneficial. Or if you haven't developed a profitable stock trading strategy yet, online trading may be dangerous. If this is the case, make sure that you educate yourself as much as you can about whichever investment options you're interested in before you begin online stock market trading.
It is important to consider that if you don't have easy access to a computer with an internet connection, you won't always have the ability to make a trade online. A back up stock trading plan should be in place to be able to call and speak to broker if this ever happens. This should be the case whether you are an advanced trader or a beginner investing online.
Successful traders consider it a good idea to choose an online brokerage house that has been in business for a while. Since the ability to trade online is somewhat new, you won't be able to find a online brokerage house that has been in business for fifty years to help with investing. The next best thing is to find a company that has been in business that long and now offers online stock market trading as an option.
Online stock market trading is a wonderful thing, but it isn't for everyone. Assess your habits carefully before you choose to do your trading online, and always make sure that you learn how to invest in your chosen investment field before diving in.
Market Direction: The 20 day moving average was the obvious target for the market pullback. Both the Dow and the NASDAQ got relatively close. However, the upturn in buying on Monday coincided with a trend line that could be drawn up through the recent bottoms. This trendline was slightly above the 20 day moving average. The strength seen bouncing off of that trendline, although not creating a candlestick reversal signal, reveals that the uptrending channel should be the most predominant indicator to be watching. The Dow formed a Bullish Engulfing signal after the Hammer signal of Friday. The lows of both days can be seen as supporting on the trendline.
DOW
The candle formation today in the NASDAQ was not a reversal signal, just a bullish day. Both the Dow and the NASDAQ are clearly trading in a trend channel. How do you trade this type of market? It is very difficult! Traders need to be very nimble now that they can see that the markets are trading in a narrow range. Attempting to go long and short may be futile in these market conditions. Until the upward trend shows a change of investor sentiment, it may be more logical to be buying long positions, selling them at the top of the channel, and buying back in at the bottoms of the channels.
Sectors - What sector are all the experts now professing to stay away from? The housing and construction sector. But, which sector is showing buy signals at important support levels? The housing and construction sector. One of the most valuable analytical factors that candlestick signals provide is that they tell us where buying is occurring. Although the rhetoric on the financial news stations is how bad the housing market is going to be, somebody is buying the housing stocks.
What makes a safe long-term buy? Buying a stock when nobody else seems to want it. Also, buying when a candlestick buy signal appears in the oversold condition. Also buying when a major candlestick reversal signal occurs at an obvious support level. Whether a short term trader or long-term investor, finding a candlestick buy signal occurring with all the parameters in the right place makes for a low risk, high profit potential trade. When the buying conditions are obvious, the stop loss level should be obvious. ( The Candlestick Forum Stop Loss training CD will be available next week ). All the conditions for a good trade can be seen in the USG chart.
USG
A Bullish Engulfing signal occurring right at the 50 day moving average indicates that the buyers may be stepping back in. What do we want to see to enter this trade? That the Bulls are still buying. If the uptrend starts from this level, what becomes the obvious target? The $53 level, which is the recent high. What would indicate this trade not working? For the short-term trader, a close more than halfway down the bullish candle becomes a level that says the bears are still in control. Where would the long-term investor place a stop? Where the long-term trend potential would be obviously negated. A close back below the 50 day moving average. Why? Because that is where the Bulls created a signal that they were starting to buy.
The candlestick signals indicate what is actually happening to a trend/price. No matter what you might hear through the investment grapevine, what you see on the candlestick charts tells you exactly what is happening.
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Good investing,
The Candlestick Forum staff