October 21, 2017

Swing Trading With Candlesticks

Swing Trading with CandlesticksThe 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…]

Candlestick Charting Is Much More Than Reversal Patterns

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.

Trend trading is undoubtedly the safest method of active trading. We’ve all heard the old adage; the trend is your friend and it’s as true today as it was when it was first thought or said.  Candlestick reversal patterns, or for the purpose of this article, candlestick patterns can alert the trader to trend continuations with as much reliability as any method available. The best part is it is also one of the simplest methods available today! [Read more…]

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. [Read more…]

Video – Candlestick Charting and Swing Trading

Candlestick Charting VideoIf 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!

Candlestick charts are probably one of the best tools a swing trader can have in their arsenal. Coupled with our trading system, candlestick patterns allow the trader to enter a trade much earlier than traditional methods of swing trading. Watch as I demonstrate our methods of swing trading in the following video. [Read more…]

Candlestick Charting – Why We Misunderstand

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.

The first mistake most traders make when using candlestick charts is assuming that every reversal pattern that forms on the chart will lead to a reversal. This is simply not true! In fact, for every candlestick reversal pattern that signals a reversal there is an average of four that will give an invalid signal. Not a very good probability is it? Candlestick charting and trading on valid signals is an extremely profitable method of trading but reliable information explaining the techniques are very rare. [Read more…]

Candlestick Charting and the Novice Trader

Morning StarWhenever 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.

A Little Candlestick Charting History

Candlestick charts have been around for centuries and were first used by a rice trader by the name of Homma Munehisa.  The rationale behind candlestick charting is that there is an irrefutable connection between the supply and demand of any product which is reflected in the price. The theory behind candlesticks also holds that prices in any market are greatly influenced by the psychology and emotional attitudes of the market participants.  Fear and Greed are two of the psychological attitudes that cause prices to move in any direction and candlestick charting reveals these emotions like no other form of analysis can. [Read more…]

Why Trade With Candlesticks?

Japanese candlestick charts have been around for centuries and have become increasingly popular among stock traders. Some have heard of candlestick charting and really don’t understand the benefits candlestick analysis can provide. Others use candlesticks on their charts but don’t fully appreciate the power of the signals given by candlesticks. Candlesticks are the study of price action and its ability to gauge market psychology.

I believe today’s trader is so inundated with trading systems based on indicators that they forget (or maybe never knew) that the origin of Western Technical Analysis was also based on price action. Before the computer, technicians would plot daily price movements on graph paper with pencil until familiar patterns would form allowing them to also have a peek into the psychology of the market. In my opinion this is becoming lost by today’s market technicians.

Don’t get me wrong! I’m not against the use of indicators if they help the trader. But it’s important to remember that indicators are mostly numerical algorithms of price movement itself! Forgetting price action and price patterns, even when using Western analysis, is forgetting why price action analysis became so effective in the first place. [Read more…]