January 20, 2019

Common Sense Candlestick Charting

Candlestick ChartingI’ve become pretty well known for pointing out what I believe is a lot of misinformation about candlestick charting over the years. Too many fly-by-night websites feature articles or even pages of information dedicated to trading with candlesticks without any regard to common sense. Many who write these articles make candlesticks seem like magic and act as if the stock price will simply “obey” candlestick reversal signals and rise or fall accordingly. Well, we all know there is no magic in the stock market and candlesticks are no different.

Candlesticks are a powerful trading system of used with a little common sense. As I teach the students of our course, candlesticks need to be applied with the rules of price action and used at price levels where price reversals or continuations are likely to happen. If you’ve spent much time on this site, you know I say over and over that candlestick reversal patterns can happen anywhere as the price moves on the chart and most of the time these reversal patterns will give the trader false signals when using candlesticks alone.

Let me give you an example; in the chart below we see the price of SFE fall back to a price level of a former high which is now support. As the price pulls back a Morning Star candlestick pattern forms and signals us to an impending rally in price. This was using candlesticks with common sense! The support level provided by the former price high was a likely spot to look for a price reversal and sure enough we’ve had a nice move up in price.

Candlestick Trade

This is far from the only way we apply candlestick reversal patterns in Candlestick Trading for Maximum Profits but it gives you an idea of how we use candlesticks while trading. We teach you a common sense approach to candlesticks that filters out many of the invalid candlestick signals that so many traders experience.

I invite you to give Candlestick Trading for Maximum Profits an opportunity to teach you how to really profit while trading stocks using our methods!

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