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Effective
Long-Term Investing With Candlestick Charting |
Long-Term
Investing, the norm for most investor’s
investment program. Investing in the stock
market long term should produce an average
annual return of 10%. Most investors are happy
with a 10% annual return. The late 90’s produced
inordinate back to back returns for a four
year period. This was very unusual. The markets
had never produced double digit returns for
more than two years in a row throughout the
market's history.
But the question that should be asked is whether
long-term investing is viable in this day
and age. Prior to the past seven to ten years,
the vast majority of investment information
was disseminated through Wall Street's brokerage
community. Long–term investing was the most
recommended trading program because the industry
professed that you could not effectively time
the market. For the professional investor
advisor, long-term investing was the safest
program to recommend because most so-called
investment experts do not have a clue on how
to identify timing elements of the markets.
Long-term investing became their logical recommendation
because all boats will rise over the long
term.
Additionally, long-term investing is promoted
by the tax system, tax rate differentials
that make holding positions for longer than
twelve months. Think of the fallacy of that
line of thinking. Most investors are buying
and holding stock positions for their long-term
investing portfolio because of an arbitrary
time period that a government agency has structured
for tax considerations. How often have investors
held stocks that were obviously going down
because they were not quite to the twelve
month holding period? Why would anybody hold
a position that they knew was going down?
Because the so-called professional investment
advisors recommend to do so to save on taxes.
As a candlestick investor, knowing when it
is time to buy and sell will make tax considerations
insignificant. Having a clear visual depiction
of trend direction with candlesticks provides
a whole new trading mentality for maximizing
profits.
But there are investors who want to do long-term
investing. The candlestick signals are an
easy profit-producing platform for any length
of investing. Long-term investing can utilize
multiple time charts for the best long term
results. The candlestick charts work as effectively
for long-term investing as they do for daytrading
and swing trading programs. The combination
of daily, weekly and monthly candlestick charts
can reveal excellent long term trades and
alert the investor of failing trades.
As seen in Ford's charts, the monthly chart
indicates that the bottom may be forming.
Once it is resolved that the longer term charts
warrant looking seriously at establishing
a position in a particular stock, looking
at the weekly chart reveals what the intermediate
time frames look like.
If the weekly chart appears to be bottoming,
then the fine-tuning of a long-term trade
can be implemented by using the daily charts.
Additionally, the failure of a long-term trade
can be identified by the same process, using
the weekly and daily charts to see if there
is weakness in an established position.
The Candlestick Trading Forum is diligently
looking for investing positions that accommodate
long-term holders. Mr. Value is our resident
expert in the long-term investing area. Before
discovering Japanese Candlesticks, Mr. Value
routinely made 80% profits annually with his
high-growth, high-momentum stock picks. He
now enhances that area by combining undiscovered
fundamentals with the proper candlestick timing.
This has enabled explosive short-term gains
within a long-term holding. Long-term investors
now have the capability of finding the best
profit potential positions and establishing
those positions at the optimal buying points.
Whether we are providing long-term investing
suggestions or investors are needing analysis
of their existing positions, investors should
not be hesitant to e-mail Mr. Bigalow and
the staff for a candlestick analysis. The
basic question should always be, “Do I want
to hold a position that I know is going down?”
The answer to this question is obviously "No",
but the long-term investing program may have
periods where holding a stock that is going
down can not be helped. However, knowing that
a position is going down, other investment
strategies can be implemented to profit from
that situation without closing the position.
Long-term investing has definite investment
strategies that can be greatly enhanced by
utilizing the candlestick signals. Basic investment
rules can be easily implemented when applying
candlestick analysis. "Cut losses short,
let profits run" is an easy strategy
to use when applying candlestick analysis.
Candlestick signals, having hundreds of years
of statistical probabilities built into them,
gives the investor an immediate advantage.
Use this advantage to your benefit. Use the
knowledge and experience of the Candlestick
Trading Forum to your benefit. Set your targets
for 20% returns plus annually. |
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