Candlestick investing has taken the trading world by storm. In fact the use of candlestick charts far supersedes any other form of charting by leaps and bounds. It’s safe to say that if you’re still using a bar chart, line chart or any other type of chart you are likely way behind the times.
When we talk of candlestick charting we speak of the interpretation of a price chart to make short or longer term trading decisions. The line chart simple shows closing prices of a security, a bar chart prints the high, low, open and close, but not to the caliber that a candlestick chart does.
The great thing about candlestick investing is that a candlestick chart is so intuitive. It’s so intuitive in fact that there are literally dozens of names for the formation of 1 and up to even 4 or 5 candlesticks together – these names of these patterns give clues to what they represent. They also make it even easier to remember the pattern.
For example a morning star doji patter. When we think of the “morning” we think of the sunrise. A morning star doji candlestick pattern is represented by 3 candlesticks. The first is a continuation of the down trend. The second opens lower than the previous candlesticks close but fails to close much higher. This is the “Doji” in the candlestick pattern.
Then price gaps up and closes to at least the half way point of the first candlesticks real body. This is the “morning” sunrise if you will. Its telling us the bears have lost steam and the bulls are taking over, if only for the short term.
Candlestick investing is a smart way to trade but be aware that the resulting move may be only for the short term, proceed with caution and have a low risk high odds plan in place to take full advantage of these signals.
If you are going to dive in and learn candlestick investing techniques, be sure to study other forms of analysis that pinpoint price strength or weakness and pull these sources together for an even more accurate picture of what price is telling us.
I teach and practice using candlestick investing techniques through multiple time frames. This gives me key perspective in identifying multi-time-frame agreement that usually leads to larger moves and more money.
The best part about learning how to use candlestick charts is that when you begin to learn the techniques you can with just a quick glance see exactly what price is doing, there’s no guessing. Try it yourself and see learn just 1 or 2 patterns begin to look at candlestick charts regularly and you will likely be amazed.
Once you get familiar with some of the patterns you will with little effort recognize price strength or weakness “at a glance!” A key to large profits with low risk is being able to identify these very conditions.
Candlestick investing techniques are a critical component to trading. I would recommend that if you’re currently trading, you stop now until you understand some of these killer techniques.
Candlestick Investing is the best tool for understanding and forecasting price action. If you want help in learning how to understand and use this tool set visit this site for a ton of free downloads. http://www.candlestickgenius.com/Candlestick-Investing.html
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