August 18, 2017

How To Enhance Your Day Trading Performance With Candlestick Charts

Are you interested in enhancing your day trading performance? If so, there are a variety of technical analysis tools that you should be familiar with. One in particular is something called a candlestick chart.

Candlestick charts are a essentially a style of bar-chart used primarily to graphically represent price movements of a security, derivative, or currency, over certain period of time.

Candlestick charts are a combination of a line-chart and a bar-chart. A candlestick chart “bar” represents a range of price movement over a given time interval. Candlestick charts are basically a visual aid for day traders to help when it comes to making a decision. For example, when the bar is white and high relative to other time periods, it means buyers are very bullish. The opposite is true for a black bar.

The reason why this particular chart is used by so many professional day traders is because it reveals a lot of information about what’s going on in the market. The simple fact of the matter is that if you want to enhance your day trading performance, you need to be willing to invest some time and money to acquire the tools and knowledge necessary to give you an edge.

When you study what some of the most successful day traders in the market are doing today, you quickly realize that these are people who never stop learning. Not only do they consume a lot of educational materials pertaining to the market, they also make an effort to learn how to use various tools that can give them an edge.

You may be wondering why candlestick charts — or any chart for that matter — would be such a useful tool for a day trader. What you need to keep in mind is the fact that the most profitable trades will only present themselves to those who are able to assimilate as much market information as possible in the shortest period of time.

Given the fact that it’s virtually impossible to track all of the news that revolves around various stocks, currencies, and futures contracts — technical analysis becomes a crucial tool that ultimately gives a day trader the edge necessary to make profitable trades on a more consistent basis.

Think about it this way — what you’re ultimately looking for are sharp movements in the price of the underlying trading vehicle. If you can spot a pocket of momentum that’s developing, that’s when you want to get in and maximize your profits. It’s like a surfer catching a great wave just as it’s starting rise out of the ocean. The candlestick chart reveals all of this information in a simple to understand manner.

To the extent you are truly serious about enhancing your day trading performance, then you definitely owe it to yourself to invest the time and money necessary to learn as much as possible about candlestick charts. You’ll be glad you did.