Candlestick Investing - How Its Done
Since their introduction not long ago Candlestick investing techniques have dominated. I wouldn't hesitate to say that candlestick investing is the premier choice for all traders. In fact if you are still using a line or bar chart you are literally in the dark ages of charting technology.
Candlestick investing is simply the act of interpreting price action with candlestick as opposed to bar or line charting. A line chart will show closing prices, a bar chart will show a little more. A candlestick chart shows the same information that a bar chart does, but in a unique more easily understood way.
With little practice a candlestick chart can be easily understood. With little effort in fact one could rather easily interpret price action. There are dozens of names to the various patterns that form on the chart, its actually harder remembering the names of these patterns than it is understanding the underlying meaning.
One of my favorite patterns is the "morning star doji" pattern. When we think of a morning star we think of "sunrise" or UP, this is a bullish reversal pattern. This pattern has 3 candlesticks. The first simply continues the previous down trend. next we get the Doji star, a candlestick who's open and close are rather close to each other.
Then price gaps up and closes to at least the half way point of the first candlesticks real body. This is the "morning" sunrise if you will. Its telling us the bears have lost steam and the bulls are taking over, if only for the short term.
Candlestick investing requires that you be aware that the forecast provided may only be for the short term, a careful risk plan and entry plan needs to be in place to take advantage of any potential move that may occur.
In attempting to pursue a candlestick investing strategy be sure to always look at price and swing structure first and develop a thorough plan before you start trading.
I teach and practice using candlestick investing techniques through multiple time frames. This gives me key perspective in identifying multi-time-frame agreement that usually leads to larger moves and more money.
One of the great things about investing using a candlestick chart is that you clearly see with just a glance what is happening with price, you can quickly asses any strength or weakness, almost as if the candles themselves were shouting out what was taking place.
Once you begin to recognize even the simplest patterns you will quickly be able to identify a trade opportunity. Proper identification of these patterns is your key to large low risk profits.
If you trade now don't even hesitate in learning these techniques now. You really shouldn't trade again until you at least have some candlestick investing knowledge. You're crazy to ignore this proven information.
Article Source: FxTradingStock.com
About the Author
Candlestick Investing is the most accurate tool for interpreting and forecasting price action. If you want help in learning how to get good at this tool set visit this site for a ton of free downloads. http://www.candlestickgenius.com/Candlestick-Investing.html
by: Mark Deaton
Total views: 30
Word Count: 490
Date: Sun, 22 Aug 2010
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