The candlestick investor has a comforting benefit when putting on a trade, using candlestick signals. The probability of a profitable trade is greatly in their favor. Probabilities! That is an important definition. Candlestick signals and patterns produce high probability results based on hundreds of years of historical results. Not only are the probabilities of being in a correct direction, but the magnitude of the strong signals and patterns produce much greater profitability than merely up trending stocks during an up-trending market. Common sense logic produces a profitable trading strategy for candlestick investors. The signals and patterns show when a high probability trades set up is in progress and the signals and patterns also can be visually analyzed to see when that signal or pattern is not producing. This allows for the proverbial cutting your losses short and letting your profits run.

Convergence analysis is the accumulation of multiple buy formations, adding credibility to a buying decision. This is illustrated in today’s trading of MDT. A gap up through the 200 day moving average produced a message signal. The gap up through the 200 day moving average also produced a bobble breakout. Yesterday’s trading illustrated the previous day’s message, profit-taking was over. Today’s positive trading illustrated the strength created by the message signal was continuing. Add the fact that MDT broke out through the 200 day moving average also confirmed a breakout of a large fry pan bottom pattern. A steady market trend, not producing any sell indications, produces the environment that allows investor sentiment to enhance the bullish pattern breakouts.

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The up-trending market remains obvious. The indexes consistently trade above the T-line. The Dow has actually formed a J-hook pattern set up off the T-line. This implies wave three is about ready to start, more upside is expected. The advantage of being able to analyze the overall market trend with a high degree of accuracy allows the candlestick investor to pinpoint which stock charts are producing the strongest pattern setups. Currently, J-hook patterns are producing very strong upside potential. The cradle pattern that formed in SHLL produced an uptrend that incorporated a J-hook pattern. Today’s strong move in SHLL today has used those patterns to produce a big frypan bottom breakout pattern. The candlestick investor gains a huge advantage by being able to recognize the reoccurring price moves that are created over and over by human nature. The probabilities of being in the right place at the right time are dramatically improved utilizing candlestick patterns.

TWLO gapped up today, producing a frypan bottom breakout. Many stock prices will move up during an up-trending market. Many will not! But utilizing the information built into pattern setups allows investors not only to be in a bullish move, but participating in bullish moves that will be much stronger than mere up trending stocks in an up trending market. TWLO can be bought on positive trading tomorrow, indicating a frypan bottom breakout. Big profits can be made in both buying the stocks and/or having the optimal entry points for strong moves for option trades.

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There is a very strong compelling indicator using candlestick analysis! A close above or below the T-line. As long as a trend does not close below the T line, the probabilities are extremely strong an uptrend remains in progress. This is a very important trend analysis factor. The Dow opened lower today, after the prospects of profit-taking over the past two weeks. It can be observed that there was weakness in the Dow trend, consolidating back to the T-line. Today’s lower open indicated more profit-taking and the possibility of the markets trading lower. However, the Dow closed above the T line. The NASDAQ, S&P 500, and the transportation index all closed above the T-line. The NASDAQ formed a very strong bullish day, providing additional evidence the uptrend was remaining in progress. This allows the candlestick investor to orient their portfolio positions based upon having much higher probabilities the uptrend of the markets are still in progress.

The ability to assess the overall market trend with much more accuracy using candlestick analysis provides the trading strategy to look for the individual stock charts that are producing the strongest upside potential, candlestick pattern breakouts. This has been illustrated by recommendations over the past few weeks that have performed very well when a breakout has occurred. Today FSLY broke out of a cradle pattern, producing an extremely high probability of much more upside. The same pattern, the cradle pattern, has been exhibited in our recent recommendation on SHLL. Currently, SHLL is in the process of producing a J-hook pattern set up, producing additional evidence a strong bullish trend is in progress. The candlestick investor benefits from knowing what the results should be based upon strong pattern breakouts. This produces the trading platform of having positions in high probability profitable trades. Not only profitable trades, but inordinately strong price moves even in a slow up-trending market.

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When the Dow is trading lower and the NASDAQ is trading higher, it indicates there has not been a change of investor sentiment, merely a shifting of funds from sector to sector. This is producing numerous very strong candlestick price patterns. The fry pan bottom is still a very potent profit potential trade set up. The J-hook patterns are producing very good profitability. Knowing which pattern breakouts are going to produce the biggest price moves creates a huge advantage for the candlestick investor. It allows for the constant cultivation of a trading account to keep the strongest positions in place. The slow steady uptrend of the indexes allow for the strong candlestick patterns to perform without the fear of any selling pressure in the overall market.

There are a number of fry pan bottom breakout potential’s. TMHC, DBI, TCDA and PE are all setting up to be high profit trades upon positive trading tomorrow. AN is a classic pattern that is indicating a new J-hook pattern wave after the fry pan bottom strong price move. The candlestick investor has the benefit of being able to identify where a dramatic price move is about to occur. Because the candlestick signals are created by the accumulative knowledge of everybody buying and selling at a specific support level, charts that are forming bullish signals at major support levels such as the 50 day moving average improve the potential of being in the right trend at the right time, GRAF with a MorningStar signal last week, AUDC bouncing off the 50 day moving average with a MorningStar signal also. Human nature works the same way time after time. Candlestick analysis merely exploits that information.

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The markets showed some consolidation today but no evidence of any change of investor sentiment. The NASDAQ was trading higher while the Dow was trading lower. This usually indicates the current trend is still in progress, merely sector rotation occurring. Knowing what the overall trend is doing allows candlestick investors to pinpoint the strongest signals and patterns occurring during an uptrend. J-hook patterns should be producing high probability/high-profit potential results over the next few trading days. The T line works as a very effective confirmation indicating a J-hook pattern has supported and now heading back up. The advantage of recognizing and utilizing patterns is that they produce much stronger price moves than merely up-trending stock prices.

PLUG is producing a very strong J-hook pattern set up after yesterday’s Doji/hammer signal, that supported right on the T line. OSTK is also producing a high probability J-hook pattern set up. The J-hook pattern provides opportunities to get into strong up trending stocks at the appropriate time after the J-hook pattern has revealed some consolidation and a new wave of buying is about to occur.GRAF produced a cradle pattern, supporting at the 50-day moving average. The same is being witnessed in AUDC. Recognizing strong reversal signals at a major support level is the advantage that candlestick investors have by knowing what investor sentiment is doing at those levels. This information, a candlestick pattern at a level that everybody else is watching, allows for high-profit high probability trades setups. This is the process for putting the probabilities in your favor.

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Today the Dow traded much higher, the NASDAQ traded lower, the S&P 500 traded flat. This provides a very simple trend analysis. There is no major change of investor sentiment, the current trend is continuing. This market scenario merely indicates sector rotation. Fortunately, the candlestick investor can easily scan for which sectors have the biggest upside potential’s during specific market trends. The transportation stocks have been showing good strength, indicated by the transportation index. Having the ability to analyze what investor sentiment is doing in specific stock/sectors allows the candlestick investor to execute trades exactly at the appropriate entry levels. This puts the candlestick investor in positions that are later confirmed by other trading techniques.

Combining the analysis of a pattern setting up, getting ready to confirm based upon individual candlestick signals, produces a double confirmation. EB produced the probabilities of a bullish flutter kicker signal at a breakout level upon a positive open. ADS is getting set up for of forming a bullish Doji sandwich breakout of the 50 day moving average, confirming a fry pan bottom breakout. This information has multiple benefits. It allows for the exact entry of a profitable trade. It implies the trade will be profitable based upon witnessing signals created by human nature. It also allows for participating in price moves that are going to be much stronger than ordinary uptrending price moves during a market uptrend. This is a very simple analytical process. The higher the correct trade ratio for a portfolio, obviously the greater the consistent profitable results. Candlestick signals and patterns indicate a price direction with a high degree of probability. Losing trades are easily identified very quickly, closed out, so those funds can be moved to a better probability trade.

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The strength of a trend is much more clearly illustrated using candlestick formations. The Dow broke out of a wedge formation. It was more evident to a candlestick investor based upon the Doji/hammer signals that bounced up off the 50-day moving average last week, followed by a gap up above the T-line. More bullish confirmation was illustrated on Wednesday when the Dow gapped up through the top of the wedge resistance level. At the same time, the NASDAQ gapped up through the previous all-time high with a Doji sandwich formation. Knowing what to expect after candlestick signals allow an investor to move much more aggressively. The simple candlestick scanning techniques allow for identifying which stocks/sectors will be moving the strongest during a strong uptrend. This is basically putting all the probabilities in one’s favor, knowing what the expected results are of human nature, candlestick signals, and patterns.

The gold stocks have produced good profits over the past few weeks. Additionally, pattern breakouts from frypan bottom’s and slow curve have created some very strong profits. The Best Friend signal has produced good breakout trades in DKS, RRC, and now looks for a good price move from that same pattern in FCX. Steady uptrends are illustrated in positions such as AAPL and OSTK merely using the T-line as a support level. Wedge breakout patterns are working effectively as in GSX. Closing out bad trades quickly is based upon simple common sense aspects of candlestick analysis. It also allows an investor to maintain profitable trades until it is time to sell, the proverbial cut your losses short and let your profits run scenario. This is made easy using candlestick signals.

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The positive trading, after the Doji/hammer signals created on Friday, was a strong probability indication the markets were going to be trading higher. Additionally, the bullish trading brought all the indexes back up above the T-line. The gap-up/best friend signal that formed in the Dow Today actually opened at the T-line and traded higher. This has very bullish implications. Candlestick patterns, such as the Doji sandwich, left/right combo, and the slow curve pattern have produced very strong price moves in these market conditions. Candlestick analysis allows investors to not only identify the direction of a price move but also allows for identifying the strong price move potentials.

Knowing the results of a Doji sandwich creates a 2+2 analysis. This is recognizing when a candlestick signal confirmation is also going to create a good pattern breakout. This was utilized in our recommendation on APPS, a Doji sandwich signal that would indicate a breakout into new territory. Witnessing bullish signals at the breakout level of a wedge pattern will produce a high probability/high-profit trade. Our recommendation to buy on positive trading on CRTO and GSX was based upon the ultimate timing to buy as a wedge breakout was confirmed. Knowing what to expect, from candlestick signals result in executing trades that will also have strong pattern breakout results. Human nature works the same way time after time. Take advantage of the information built into each candlestick signal. This dramatically improves the probability of being in a correct trade direction as well as being in a strong profit trade.

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The sideways mode of the market is very beneficial to the candlestick investor. It allows for scanning for either strong bullish or bearish individual stock chart patterns, knowing the price movement will not be affected by an overall market trend. Currently in this slow up trending market, there has been very strong pattern breakouts. Fry pan bottom patterns have produced some very big profits. This can be seen in the homebuilders stocks,TOL, PHM. Bullish flutter kicker signals have created strong profit trades. When the market is not moving with great aggressiveness in one direction or the other, the big profit trades are going to be the results of candlestick pattern breakouts. This is the result of identifying where human nature starts producing big price moves.

The strength of the earnings in the big traders, AMZN, AAPL, FB, GOOGL should produce more bullish confidence in the markets tomorrow. A positive open in the market indexes tomorrow would produce more evidence the NASDAQ and the S&P 500 are going to continue to trade above the T line. Positive trading in the Dow could bring it back up above the T line. Currently, with a couple of the indexes trading above the T line in the Dow trading below the T line, the market trend analysis is still evaluated as a sideways mode. However, there are still numerous profitable pattern breakouts in progress. Take advantage of the probability factors that result in strong candlestick patterns.

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The major indexes closed below the T-line on Friday. The NASDAQ had a strong sell signal, a bearish Doji sandwich, but the trading of Friday, although lower, was trading above where it opened. This gives the candlestick investor a much quicker insight as to whether the selling was very strong or not. Today’s positive trading brought both the Dow and the NASDAQ back up to the T line. The S&P 500 and the transportation index both closed above the T line. This would imply the lack of any major selling pressure in the markets. However, the Dow and the S&P 500 still need to close back up above the T line to confirm that bearish sentiment is not in control. It will be important to see how the markets trading tomorrow. A lower open, followed by lower trading, failing to get the Dow and NASDAQ up above the T line will continue to imply profit-taking/downtrend of this market.

Fortunately, candlestick patterns reveal which sectors are remaining strong. The housing market is showing strength with numerous housing stocks producing Fry Pan bottom breakouts. Kicker signals are producing good strong trades. The strength of some sectors and the strength of specific signals also reveal a lack of overall very sentiment participating in the current markets. The Best Friend signal, producing a good uptrend in our recommendation of DKS, produced a Best Friend breakout going into wave three. The strength of candlestick signals and patterns allow an investor to identify which sectors and stocks are producing the highest potential profit trades.

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