The recent market action has not been kind to long term investors with prices going up and mostly right back down again. But to the swing trader this market volatility has really been nice to trade. Long term holders have seen little increase or worse in their portfolios while the swing trader has been able to take advantage of the ups and downs the market has given us.
Here at Candlestick Trading for Maximum Profits we have been able to take advantage of these price swings to profit both long and short. Candlesticks, coupled with our unique trading system, have really been successful trading these market moves. While candlestick reversal patterns are a great tool to find changes in trends for the longer term trader to ride out they really shine when used to swing trade. [Read more…]
Bullish and bearish engulfing, morning and evening star patterns or the bullish and bearish kicker have become well known among traders everywhere as common candlestick reversal patterns. Yes there’s more but for the purpose of this article I wanted to use these examples to get the juices flowing just a bit knowing that they are some of the most popular patterns to trade. Reversal patterns have become synonymous with candlestick charting but if you’re using them as a tool for trend reversal recognition only you’re missing half of the benefit candlesticks give.
I’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.
If you were to ask most buy-and-hold traders they would tell you the markets have done very little in the last few months and they probably have seen very little profit. With the ups and downs we’ve seen in the markets it may seem like there has been little profits to be made. A swing trader would tell you a completely different story. A swing trader lives by market volatility and the more volatile the better!
So you’ve decided to use candlestick charts and are searching for information to learn the trading methods of candlestick charting. You’ve found lots of information on the web, most giving you the same information you’ve seen many times before and you are beginning to wonder if anyone really knows how to properly and profitably use candlestick charts much less teach it. Maybe you plot your charts using candlesticks because of the visual appeal and the ease of interpreting the daily candles but you really don’t know how to rely on candlesticks to make your trading decisions. This article explains why many traders begin to use candlestick charts and give up without gaining the benefit valid candlestick patterns can give.
There are many trading systems to confuse the trader these days and almost all of them have one thing in common…indicators! It seems that price action trading, which is what technical analysis is really all about has been all but forgotten. In my opinion, price action is not only the most effective method for analyzing trades but also a simple method to learn for traders at any level.
Many new traders looking for charting software begin their search looking specifically for candlestick charting software. I may be wrong (and if I am correct me please) but I don’t believe there is a robust software package completely dedicated to candlestick charting. Most, if not all, of today’s most popular charting software packages can be plotted in candlesticks. Candlesticks have become very popular in recent years and many choose to plot their charts in candlesticks for the visual appeal. While it’s true that candlesticks are visually appealing it’s the power of candlestick theory that makes them so profitable if used correctly.
Whenever attempting any new undertaking, it is always best to start simply by using time proven methods. For anyone considering online trading, there are no better recognized techniques than the art of mastering candlestick chart formations.
Statistics show that over 80% of options traders lose money. Because of their very nature, stock options seem to stack the odds against the trader from the very start. Profiting in stock options requires the trader to correctly analyze and predict a future price move. Then the trader will have to successfully forecast the timeframe when that move is going to happen! Finally, the trader must also know how big that price move is going to be! The combination of these three factors makes it extremely difficult for the average trader to enter an option trade successfully.