Candlestick Stock Analysis

While stocks go up and stocks go down traders using candlestick stock analysis commonly make money. There have been many approaches to trading stocks over the years. Those engaged in long term investing believe that well-chosen individual stocks, market sectors, and even the stock market in general will rise in value over the years.

They cite historic data going back, typically, to the stock market crash that ushered in the Great Depression. The time period included in their data includes the period of the historic rise of the United States to Superpower status and the fall of the USSR. As Japan, China, and Europe have risen in global prominence this argument has been used less and less. Traders take an objective view of the stock market. Traders recognize the fact that there are growth stocks, dividend stocks, volatile stocks, and stable stocks.

All stocks can rise or fall and all are tradable using Candlestick pattern formations. Traders using Candlestick analysis of stocks seek to profit from both the ups and downs of stocks and the market. Traders using objective and easy to read Candlestick patterns as a guide obtain a clear view of market sentiment and are commonly able to profit from market trends, market reversal, and general market volatility. Candlestick stock analysis helps both the long term investor and day trader successfully and profitably anticipate stock price movement.

Candlestick stock analysis provides an objective view of market sentiment. Candlestick charts have a long history, going back to commodity trading of rice in Japan centuries ago. Traders recognized that certain price patterns repeated themselves and that traders could effectively ignore the fundamentals of the market and simply base their trading upon Candlestick patterns.

As a Candlestick pattern develops it becomes statistically more likely that a given end result will emerge. A classic pattern is the Doji Candlestick. This vanishingly short Candlestick has long upper and lower shadows. It occurs at moments of market indecision. What this signal indicates is that the stock opened and closed the trading period at roughly the same price but that it tested both higher and lower. The signal only indicates market indecision and not market direction. However, when stocks are trending up or down, and then a Doji Candlestick pattern occurs, it commonly indicates that stock prices will reverse direction.

By using time honored signals such as the Doji, traders can profit from candlestick stock analysis.

Traders, unlike long term investors, commonly pick volatile stocks to trade. They may trade stocks directly or may trade options on stocks. In either case easy to read Candlestick signals take fear and greed, the twin bugaboos of investing and trading psychology out of the picture. Candlestick stock analysis helps traders predict stock price direction. Coupled with Candlestick trading tactics these easy to use signals can lead to profits when trading commodities, futures trading, options trading, and Forex as well as stocks. Traders have been profiting from the use of Japanese Candlestick charts since the days when the Samurai roamed Japan.

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