Amidst confusing news, stocks traded higher recently on low stock market volume. The world economy is ever so slowly coming out of the worst recession in three quarters of a century. Huge debt burdens plague both the USA and the EU, the two most powerful economies of the world. It seems that every day there is another pronouncement from Europe.
One day we hear that Greece will likely default on its debts and cause a ripple effect throughout the EU. The next day we hear that Germany and France will come to the rescue, despite strong political opposition at home. It is not surprising with such confusion that investors and traders find fundamental analysis difficult and have taken to sitting on the sidelines resulting in low stock market volume. Thus it is also not surprising that many technical stock traders are feeling a little uncertain as well.
One does well to remember in such times that there is a stock trading system with centuries of experience in trading when there are conditions of high market volatility, confusing market trends, high market volume, low market volume, and seemingly total market inefficiency. Japanese Candlestick charts have been helping make profits in day trading and long term investing for a long, long time.
After several days of a falling market, stocks rebounded recently. The herd mentality that all too often infects the market had everyone believing that a bear market was in the offing. Then, when the market turned upward, many traders and investors were uncertain of what to do and sat on the sidelines while stocks rallied. Traders using Candlestick stock analysis as a guide are able to avoid the distraction caused by the psychology of trading stocks. Candlestick traders commonly look for periods of apparent confusion in the market and use clear and easy to read Japanese Candlestick charting to profitably buy stock, sell stock, or trade options. Japanese Candlesticks have been guiding successful traders for generations.
Going forward those involved in long term buy and hold investing and those whose only interest is scalping profits in a moving market can both profit from the insight that Candlestick charts provide. A lasting value of using stock technical analysis tools is that it gives traders insight into market sentiment even in confusing markets. When there is low stock market volume due to general confusion about fundamentals Candlestick signals and Candlestick trading tactics help traders profit when all others seem to be lost. Low stock market volume or high stock market volume, Candlestick signals help traders and investors anticipate stock price movement.
When fundamentals seem chaotic there is still tendency for the market to come to a consensus. Using Japanese Candlesticks, traders are commonly able to anticipate that consensus before those guided only by the stock market news and their sense of shifting fundamentals. Whether trading stocks, options, commodities, futures, or foreign currencies, traders do well to use Candlestick patterns as a guide in reading market sentiment. In the low stock trading volume of today there are profits to be made by those with the tools to see clearly where sentiment will take the market.
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