October 21, 2017

Do You Really Need A Candle Stick Course To Be A Successful Investor?

Let’s take a moment to separate some fact from fiction. Do you really need a candle stick course to be a successful investor? No, of course not. There are always exceptions to every rule. However, the overwhelming majority of people who have become self-made millionaires as a result of trading in the financial markets have used candle stick charts to give them the edge they needed.

Why are candle stick charts so popular amongst wealthy traders? It has a lot to do with the fact that these charts enable traders to quickly and easily spot profitable trends. As a result, trades can be made that have a higher probability of producing a profit. Stop and think about the logic of that for a moment. Why would you want to spend countless hours doing fundamental analysis when you could look at a chart and quickly make a determination as to whether or not a profitable trade can be made?

Another factor that needs to be taken into consideration is the amount of time that you realistically have available to devote to your trading activities. If you’re just getting started, there’s a reasonable chance that you want to become a successful investor in the shortest amount of time possible. If that’s the case, then you need to use a trading methodology that gives you a reasonable chance of reaching your goal. Investing in a candle stick course is one way for you to leverage your time effectively.

At the end of the day, you don’t need to necessarily invest in a candle stick course to be a successful investor. But as mentioned a moment ago, it really makes a lot of sense to emulate people who are already self-made millionaires as a result of their trading activities. If these people are actively using candle stick charts, then you should seriously consider doing the same thing. But before you do so, it’s important that you be willing to learn as much as possible about these charts so that you can learn how to interpret them and spot profitable trades faster than the competition.

Don’t forget, the amount of money you may have to spend to gain access to a high quality candle stick course pales in comparison to the amount of profit you have the potential to generate through your trading activity. Therefore, don’t allow yourself to be dissuaded by what may seem like a high-priced course. It’s ultimately a drop in the bucket relative to the amount of money you have the potential to make.

The Majority Of Stock Market Millionaires Have Invested In A Candle Stick Course — Are You Ready To Join Them?

Few people realize the fact that the majority of stock market millionaires have invested in a candle stick course. Are you ready to join the ranks of successful traders who make a lot of money in the market? If so, then you need to be willing to embrace the reality that without access to the right knowledge and tools you simply will not have the same odds of being successful.

Let’s face it, the financial markets are not fair. People who have access to knowledge and tools that give them an edge will typically outperform those who are simply placing trades based on intuition and guesswork. Why do you think the majority of stock market millionaires have invested in a candle stick course? They have done this because they understand that the only way to provide themselves with the edge they need is to be educated.

That being said, you may be reluctant to spend any money on your education. You may have heard that it makes more sense to simply start trading in the stock market immediately and to learn about the process on your own. While there is nothing inherently wrong with trading in the market with your own money — it’s oftentimes a mistake to do so before you have an understanding of how the markets work. At a bare minimum, you definitely owe it to yourself to learn as much as possible about candle stick charts.

Why are candle stick charts so useful? Generally speaking, it’s because these types of charts allow traders to quickly and easily assimilated a lot of information pertaining to a particular stock. There is very little time to investigate all the financial data and other fundamental metrics of a company when deciding whether or not it makes sense to pull the trigger on a trade. A candle stick course will allow you to spot profitable trades and to potentially make a lot of money quickly without having to know a lot about the underlying stock. Think about that for a moment. Can you see how that would be of benefit to you as a trader?

As with anything in life, it really comes down to you making a decision. You need to make a decision as to whether or not you’re truly serious about making a lot of money in the stock market. If you are prepared to join the ranks of stock market millionaires, you need to be willing to invest in a high quality candle stick course.

Don’t Let The Cost Of A High Quality Candle Stick Course Stop You From From Getting The Edge You Need

Far too many people make the mistake of getting stuck on the cost of a high-quality candle stick course. Listen, if you’re somebody who’s truly serious about making a lot of money in the financial markets, then you need to provide yourself with the edge that you’ll need to be successful. The only way for you to successfully compete in the highly complex financial markets that we have today is to be educated.

Education sometimes gets a bit of a bad rap. People want to start making rapid-fire trades under the assumption that they can begin making money immediately. While it’s certainly true that skilled traders can make several thousand dollars in a matter of minutes — these are people who have invested a lot of time and money on their education. They also often have years of real-world experience.

Think about the amount of money that you want to make in the financial markets. For example, maybe you are thinking it would be nice to make $40,000-$50,000 in the next six months. Would you really think twice about investing in a high-quality candle stick course that costs $2000? Think about the economics of that transaction for a moment. You’re investing $2000 and providing yourself with the knowledge and expertise that’s necessary to potentially make $40,000-$50,000 inside of six months. It’s a no-brainer.

We’re all adults here — we know there are no guarantees that anybody will ever make any money at all in the financial markets. But let’s get real for a moment. We all know that there are a lot of people out there making obscene profits every single day. How are they doing it? It’s simple. They have a game plan. They know what they are doing. They understand how to use candle stick charts to spot profitable trades. It’s really that simple.

To the extent you want to be an ultra successful trader in the financial markets, you need to be willing to spend some time and money giving yourself access to the knowledge and tools necessary to be successful. It’s as simple as that. Don’t make the mistake of thinking that you can learn how to make money in the financial markets on your own. That is a frustrating and extremely costly process that you do not need to go through in this day and age when there is so much information out there that you can quickly and easily access for a modest fee.

How A Candle Stick Course Can Dramatically Improve Your Trading Performance

There are several ways in which a candle stick course can dramatically improve your trading performance. But first, you need to make a decision. You need to decide whether or not you want to be a successful trader. That may strike you as a silly question, but far too many people get into this business without having a clear objective of what they want to accomplish.

Let’s face it, the vast majority of people who get involved with trading will ultimately lose all their money. These people aren’t inherently bad or stupid, they just lack a clear focus and a determination to succeed. If you want to make as much money as possible as a trader in today’s competitive market environment, then you really need to think about investing some time and money on a high-quality candle stick course.

These days, there is simply far too much information for trader to assimilate. You can’t spend half the day researching the fundamentals of a company to figure out if their stock is worth buying. Likewise, it’s virtually impossible to pour over all of the macroeconomic data necessary to make an intelligent decision as to whether or not a particular currency pair may be worth trading. Candle stick charts are used by the pros to help them make more intelligent trading decisions. You should use these charts, too.

To the extent you happen to be brand-new to the world of trading in the financial markets, and you’ve made a clear decision that you want to be successful, then you definitely need to invest the time and money necessary to educate yourself. Some people think that the best way to learn how to trade in the financial markets is to deploy their own capital and to begin trading immediately.

There is nothing inherently wrong with the idea of trading with real money while you’re learning. However, stop and think about what that means. You’re risking what could very well be irreplaceable capital in a venture that you know very little about. Does that make sense to you? The overwhelming majority of successful traders got their start by learning as much as possible about candle stick charts. Then, only after they had some experience, did they begin trading with some real money.

So how exactly can a candle stick course dramatically improve your trading performance? Simply put, this type of course will give you the knowledge and information necessary to correctly and profitably interpret candle stick chart patterns. This will allow you to quickly and easily pull the trigger on trades and make more money than you could ever have imagined possible.

Heikin-Ashi Candlestick Charting

Depending on the charting package that you use, you may have been intrigued to see the name Heikin-Ashi as one of the options. Heikin-Ashi is Japanese for “average bar”, and the method of plotting is a way to smooth out the fluctuations that you typically see with normal candlestick charting. In use, you would need to see both charts as the Heikin-Ashi is not a substitute for a normal price chart, but simply provides a different window on the information.

The open-close-high-low prices are plotted in the same way as a regular candlestick chart, but they are calculated in a different way rather than simply being at the prices that were traded. For convenience, I’ll refer to them as the HAopen, HAclose, HAhigh, and HAlow.

The opening price HAopen is calculated from the previous day, and is the average of the previous day’s HAopen and HAclose. Basically a different description of where the price was reckoned to be by the market previously, and therefore leading into the present day.

The closing price HAclose is the average of the current bar’s OHLC, the actual trading prices for today. Once again, you can view this as a description of where the market thinks the price should be on this day, and therefore the settled closing price.

Having defined the HAopen and HAclose, the other two are easy. HAhigh is the highest of the actual high price, the HAopen and the HAclose. HAlow is the lowest of the actual low price, the HAopen and HAclose.

Incidentally, you can see that you need a Heikin-Ashi calculation of the previous day to even draw the charts properly. However, if you start with conventional values for the first day plotted, it will rapidly fall in line with the true HA values.

The result of this blending of prices is that the candles drawn are much more indicative of the trends. Here is a normal chart for BAE Systems –

Longer Term Trading with Candlesticks

You have probably heard that all of your technical analysis tools can be used on “any timescale”, and thought that this meant that your methods of trading analysis of daily charts could be applied to intraday, say 5 min. charts, if you became interested in day trading. While that is true, the “any timescale” comment also applies to longer periods, such as you should consider when investing. Here’s some more trading info on longer term trading with candlesticks.

I am classifying “investors” as people who are not terribly interested in staying on top of the comings and goings of the stock market, and prefer to lodge their money in financial instruments on a long-term basis. They turn a blind eye to the ups and downs of the market from day to day, focusing instead on long-term gains. This is in their overriding belief that over the course of time and over history the stock market will always come out on top. While the nature of the market has changed, which caused some to question whether this is still a worthwhile strategy, there are many who still stand by this policy. But it is a mistake to think that any investors should only consult fundamental analysis, looking for the underlying earnings and marketing results in order to direct their portfolio.

A more sound methodology is to use fundamental analysis in your initial selection, but to consult weekly candlestick charts for any early sign of weakness. By the time weakness becomes obvious in earnings reports, it is likely that you will have lost far more than if you simply applied your candlestick charting knowledge to the weekly price chart.

Long Term Trading with Candlesticks

Here is a weekly price chart of the Dow Jones Industrial Average. It serves to illustrate how candlestick patterns can still be found at this time scale. The arrows point to particular candlestick patterns that the charting software has located. For instance, “A” is the Hammer pattern, usually thought of as “hammering out the bottom” and reversing a downtrend. “B” is the Bullish Engulfing pattern, where a bullish white candlestick totally covers the real body of the previous bearish candle.

As you should expect, not all of the discovered patterns work, but it is clear that they are as effective in this context as in a daily chart. Before relying on them, you should consult other technical analysis including indicators, volume, support and resistance levels, etc. A candlestick pattern alone is simply an indication of the week’s trading, and while it is indicative of market sentiment it is no substitute for corroborating evidence.

If you decide to use candlesticks in your investment portfolio, you still have to take a longer-term view towards your money. For instance, the weekly candlestick chart will not give you an indication of a failing trend until the end of the week when you review it. Thus you might have a higher loss than if you had treated it as short-term trading, and checked for patterns each day. Nonetheless, the superior information which you can get from using candlesticks in your investing can still save you significant amounts compared with buy and hold tactics which are used by most small investors.

Candlestick Trading Tools

To hear some people talk, you would think that

candlestick trading tools

are the Holy Grail for the trading community. Devotees may claim that market sentiments are magically revealed to them, and this transparency allows them to achieve far greater profits.
Yet on the other hand, it seems that other traders just don’t “get it”. They locate the common candlestick patterns that they are told to watch for, yet their trading statistics do not improve. The question is how both attitudes can coexist in a single trading market.

The answer is that it all depends on the approach that you take to incorporating knowledge of candlesticks and their patterns into your regular trading life. When you start using candlesticks, a little enthusiasm is appropriate but it is important not to forget the other principles of trading that you have learnt. Candlesticks are only tools, another “string to your bow”, and must be used in conjunction with traditional trading concepts.

There are a number of important principles that you should remember when bringing candlestick charting into your trading.

  • First and foremost, remember that all traditional Western charting tools can and indeed should be used on a candlestick chart, just as they are on the original Western bar chart. The candlestick chart shows exactly the same information, simply in a more easily readable form.
  • Candlestick patterns are only relevant if they occur in the correct trend. For the most part, candlesticks are used to identify reversals, so even more obviously there must be a trend to be reversed.
  • A candlestick pattern by itself, no matter how “perfectly formed”, should almost never be considered a good reason for a new trade.
  • If a candlestick pattern confirms a separate indication that you have gleaned from technical analysis, then the reversal is more likely.
  • In fact, the more signals that you see, both in candlestick patterns and in Western indicators, the more likely the predicted action.
  • The candlestick shows not only the prices traded, but also the strength of sentiment behind the move.
  • Candlesticks can be useful for timing trades, and may initiate action when other indications are favorable, such as the start of a breakout.
  • Candlesticks should not be used to identify price targets. Other Western tools, such as support or resistance levels, trendlines, or Fibonacci ratios are more appropriate.
  • There is always a price that says that the trade was wrong, and that it should be exited – the “cut your losses” principle. You must know this price before you open your trade.
  • Finally, you should always assess the risk/reward of each trade you are considering, to determine whether the trade is worth taking in the first place.

Many of these principles will be familiar to you from traditional trading. For some reason when traders “discover” candlestick patterns, they sometimes abandon the experience and common sense that they have accumulated in the past in pursuit of more intricate and satisfying pattern recognition, and then become frustrated that the patterns seem to “work” less than they were led to believe. Trading is a percentage game, and used correctly candlesticks can and will serve to better your odds.

Candlesticks with Context

Candlesticks are exactly the same as any other charting method in that they represent historical market activity in one form or another. A moving average for example is just an average of price over a set period rather than the price at a particular point within a set bracket of time. Whichever method is employed, it must allow the user to see certain facets to how a market traded historically and thus give them a better idea of what the activity might mean for future prices. Candlestick patterns are particularly helpful in quickly and visually identifying the various repetitive price movement patterns which often lead to the market subsequently moving in a particular direction. However, if it were always as simple as just trading the occurrence of a candlestick pattern, far more traders would be successful than there currently are. The key to adding a greater level of consistency to trading these patterns resides in knowing what the market has done and where the pattern is located. This is technical context.

All markets where you can buy or sell a product or contract are fundamentally auctions. The very basics of this idea are that current prices can be seen as fair with the market moving back and forth through accepted fair value or they can be seen as unfair and the market moves directionally ‘searching’ for fair value. What it really boils down to is that any market can be range-bound or it can trend and all markets move from one to the other and back again in various different timeframes. Using this principle, we can identify places where a market changes from one condition to the other or remains the same and therefore gain some context about how it might move given a certain reaction to this context. This reaction can be interpreted using candlestick formations. Merely spotting a formation and assuming it will always mean the same thing however, is never going to be as consistent as assessing each occurrence on its own contextual merits.

Here’s an example from Apple (AAPL) where I’ve simply highlighted a few different patterns:-

Clearly there are many more candlestick patterns within this snapshot, but for the purposes of this exercise I wanted to point out a few which clearly failed.

Let’s elaborate on the context of the same example. Here’s a zoomed out view AAPL over a longer period, just prior to the previous chart:-

Although there is a clear uptrend in force in the longer term, the reason I’ve noted that the trendline is only “possible” is due to the fact that it’s only touched twice up to this point. So it’s there to be aware of, although not necessarily to be used as a support line.

Moving forward in time and back into the first chart we looked at:-

You can see much better now that once the short-term trend (green line) breaks, a range is established. You might have decided that actually it would be better as a pennant-like formation with a descending trendline from the top of the range. Even though you’ll probably notice that there are opportunities by doing this, I’m focusing on going with the long-term trend. Therefore what matters is where support is coming in and that the market has come into balance. Ranges can break or they can expand. Here, we see two expansions down. The first is followed by a decent move upwards and the second is followed by a test and break of the entire range in the opposite direction. Taking another look at the long-term picture:-

In the second expansion, you can clearly see that not only was the attempted downside range break a bullish hammer reversal candlestick, but also it completed or verified the potential long term trendline already in place. Using all of these ideas in combination to form broader context would have given a trader the confidence they needed to place a very good trade indeed. So when you trade with candlestick patterns, make sure you use them with technical context.

Trade well.