Candlestick Trading Blog
May 6, 2008
Market Analysis
Why market analysis should be your first step for deciding your stock portfolio allocation. Many, but certainly not all, stocks will move with the market. For this reason alone it is well worth your time to perform your own analysis, and more specifically the analysis required to determine a bull or bear market. The old adage of ‘running with the trend’ translates into ‘don’t fish upstream’. Making money in the markets is challenging enough without going against the crowd. Market analysis does not need to be overly complicated. The main goal is to become comfortable with your personal analysis until you can recognize when a change is coming. One example for a quick analysis could be the evaluation of Volume and Price. A general observation can be easily made when witnessing a spike in volume; which indicates a larger than normal number of buyers/sellers. We all know that Price tells you which direction the buyers/sellers are going. There are several websites which provide a plethora of free stock market analysis tools. Market analysis requires common sense (which is not so common). Simply stated; nothing goes up or down in a straight line. As you become more comfortable doing your own analysis you will appreciate the differences between healthy ‘profit taking’ and severe ‘sell offs’. Candlestick charts provide a huge advantage in your market analysis. Unlike bar charts, which tell you what price movements did during a specific timeframe, candlestick charts unfold secrets before your very eyes by telling you the investor sentiment and what to expect in the future. Market analysis with candlestick signals can be done by only learning 12 Major Candlestick Signals. Determine the overall trend by viewing the DOW and the NASDAQ. Let the market tell you what the market is doing. The same analysis used for individual stocks can be applied to the market indexes in general. There is a wealth of free information available over the internet to assist you in your analysis of the markets. (Everyone wants to know which way the market will go) This is why we choose Candlestick Signals and Candlestick Charting for this type of analysis. Even the most basic of candlestick charting methods provides its user with a valuable technical analysis tool giving you a head start on other traders. (Read more in our article ‘Market Analysis Systems - Seeing the Market Move; or ‘Market trend analysis with candlestick signals’) If all of this talk about market analysis has confused you, may I suggest you join us on Thursday evenings for our free live stock chat sessions. Additionally, you may wish to review Stephen Bigalow’s personal CD on Trend Analysis; a 90-minute training video outlining the steps Steve personally uses each evening to perform his own analysis. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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