Candlestick charts not only reveal the immediate price movements based upon investor sentiment but candlestick charts also allow for a much more accurate evaluation of what investor sentiment is going to do in the near future. This is extremely valuable for these market conditions. The market indexes have moved into new high territory, all-time high territory. Will the markets go higher? A large percentage of investors rationalize that if the markets are at all-time highs, it is time to take profits. Candlestick charts reveal a completely different evaluation. A J-hook pattern was formed in the Dow right at the breakout area of new highs. Understanding the results of a J-hook pattern made it very clear that there was buying expectations based upon the J-hook pattern that indicated the recent highs were still going to have more upside. Analyzing investor sentiment based upon candlestick charts allows for logical analysis of a price trend, eliminating the ill rational emotional expectations. If a J-hook pattern reveals more upside through the breakout area, the longer-term charts can then be analyzed with much more accuracy. The Dow has moved sideways for the past 18 months. The current breakout of that resistance level indicates a high probability the next wave may be in progress, producing the potential of another strong upside market on the basis of the first wave prior to the 18 month consolidation.

Having a strong probability analysis of the overall markets allows for aggressively participating in the strong candlestick chart patterns. This allows for taking advantage of pattern breakouts such as frypan bottoms and J-hook patterns. Individual stocks can produce extremely strong profits with pattern breakouts that do not have the dampening a fact of selling indications in the general market. Adding all these elements together allows an investor to put positions together that have high probabilities of producing high profit trades. Remember, this is based upon one simple factor. Human emotions produce the most reliable chart pattern indicators in the world.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

What does identifying candlestick reversal signals at important technical levels do for an investor? It allows for entering trades at the appropriate confirmation levels, which is usually well I had of other investors. This became clearly evident when analyzing the Dow during this past week of trading. Bullish signals occurring at the T line made much more clear the uptrend was remaining in progress. This instant visual analysis allows the candlestick investor to enter bullish trades more aggressively knowing that the overall trend of the market remains bullish. This results in bigger potential profits but more importantly allows for entering trades during the early part of a new trend movement, which creates the trading environment for closing out losing that didn’t perform with much smaller losses. This greatly enhances the trading strategy of cutting your losses short and let your profits run.

When there is not the fear of any great bearish investor sentiment in the markets, candlestick bullish patterns perform much more profitably. Because prices move based upon investor sentiment versus fundamental reasons, a market atmosphere that does not have the dampening a fact of possible selling produces much bigger gains in candlestick pattern breakouts. Frypan bottom breakout’s have created big gains in our recommendations on STNE and ANGO this week. The bobble breakout has also been very effective, i.e. MDR and YETI. The probability factor of being in the correct trade at the correct time is dramatically enhanced when utilizing the movements of reoccurring human nature. The visual aspects of candlestick analysis clearly illustrate when a bullish pattern is in progress or when a prospective bullish trade does not perform, it allows for closing that position and moving on to a position that has better probabilities.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

The summer doldrums! Makes trading much more difficult. However, a huge advantage for utilizing candlestick scanning becomes much more apparent. The simplicity of the visual analysis for strong candlestick signals and patterns enhances the ability to find good trades even when the overall market becomes lethargic. ROKU was recommended today because of the bullish Doji sandwich that broke through the T line on Friday. The results of a Doji sandwich creates a high probability trades set up. QD was recommended based upon the same pattern identification. Most investors overcomplicate trade set up analysis. Candlestick analysis remains very simple. Candlestick signals and patterns are going to produce high probability results because human nature works the same way time after time. The probabilities of being in a correct trade is merely incorporating visual signals and patterns with other visibly recognizable indicators. A candlestick buy signal coming back up through the T line or the 50 day moving average merely reveals that a buy signal is breaching a level that most other investors are watching. The buy signal allows the candlestick investor to be positioned before everybody else starts buying into a position based upon other indicators.

AMZN is a good example of a bullish candlestick signal showing the probabilities of a breakout through a resistance level. A bullish flutter kicker signal indicates a frypan bottom pattern breakout through a perceivable resistance level. This is called convergence analysis or 2+2, simply adding multiple signals and patterns at breakout levels that dramatically improve the probabilities of knowing when to get into a bullish or bearish position. We often state that this is not rocket science, this is merely learning what human nature normally does based upon the signals that have been identified through hundreds of years of analysis.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

The market indexes are approaching the all-time highs again. With the markets be able to breakout into new high territory? Candlestick charts reveal patterns that would imply a new high will be reached. The J-hook pattern is setting up in the Dow, supporting off the T-line. What does this imply? A J-hook pattern forming near the resistance levels of the past highs are just starting a potential wave three. If wave three is the same magnitude as wave one, wave three indicates investor sentiment will move into new high territory. This analysis becomes a great benefit to the candlestick investor. It indicates there will be likely a week or two or more of moving into the new high territory. Whereas other investors might be hesitant about buying until they see there is a breakout, the candlestick investor already has incentive to be buying knowing what the results of a J-hook pattern will produce. Simple logic dictates that if the market in general is going to continue higher, the candlestick investor has the ability to scan for the best bullish signals and/or patterns that are going to produce the best results when the market is in an uptrend.

If the J-hook pattern is a predominant pattern in the overall market, that implies that numerous J-hook patterns will be forming in individual stock charts. Because the magnitude of wave three can be estimated based upon the magnitude of wave one, identifying which price moves are going to produce the best percentage profits is very easy. Our recommendation on CDLX Today was based upon witnessing a J-hook pattern set up, knowing that if it traded positive it was going to be a J-hook pattern breakout. Because human nature works the same way time after time, simple candlestick scanning techniques allows for identifying which chart patterns are going to produce the most profitable results, based upon a high probability expectation. Why is this important? If the market is going to be in a strong uptrend, most investors will make moderate profits. Moderate profits versus tremendous profits because of the normal trading habits of most investors. An upward trending market will produce numerous uptrending stocks. However, many investors will also have losing trades during an uptrend. Candlestick analysis greatly reduces the offsetting results of having losing trades in the portfolio by allowing investors to have a dramatically improved trading results in a much larger percentage of their portfolio.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

The nature of each candlestick signal/formation provides a much more comprehensive insight into the strength of the Bulls or the Bears. Witnessing a signal at important technical level, such as the Dow forming a Doji day right on the T line provides a visual analysis that will indicate the direction of the trend based upon the Doji rule, the trend will usually move in the direction of how they open after a Doji. A positive open tomorrow would reveal the T line acting as a support for the Dow. The NASDAQ and the S&P 500 are also showing potential reversal signals at the T line. The NASDAQ confirmed a homing pigeon signal, a Harami that has both candles the same color, by trading positive today and backup above the T line. Although today’s trading did not illustrate a major reversal in the markets, at least the candlestick formations indicated there was not currently any significant selling pressure. This was further evidenced by the number of bullish chart patterns versus the number of bearish chart patterns in today’s trading.

The strong patterns allow for not only identifying the direction of the next potential price move in individual stock charts, but it also provides the opportunity to participate in much stronger price moves than merely uptrending stock prices during an uptrending market. The J-hook pattern, more specifically the bobble breakout patterns, are providing high probability/high profit trade set ups. A candlestick investor gains excessive visual analysis information based upon the patterns that produce expected results. Identifying a pattern breakout at the T line level enhances the probabilities of being in a strong profitable trade. The T line, working in conjunction with candlestick signals and patterns, dramatically improve the probabilities of entering and maintaining high profit positions. Candlestick trainings direct investors to trade set ups that produce high profit results based upon the reoccurring nature of investor sentiment.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team

The visual graphics of candlestick analysis allow investors to much more accurately assess where markets may be continuing an uptrend or getting ready to top out. This is evident in the Dow with the indecisive candlestick signals, a shooting star signal and a Doji occurring in the overbought area. Additionally, it merely takes visual analysis to recognize this indecisive trading, potentially a reversal in the trend, is occurring at the exact same levels the markets topped out about a month and a half ago. The nature of each candlestick signal allows for the analysis of what type of investor sentiment is occurring at observable potential reversal areas. Is the market ready to top out? The alert becomes much more apparent when recognizing where indecisive trading is occurring.

Having the visual ability to analyze whether the market is still capable of additional uptrend or if it’s about ready to pull back as a reversal or a profit-taking area, allows for the appropriate trade positioning in the portfolio. Any signs of weakness in the markets in this area creates a trading strategy that dramatically improves profit probabilities. If the market appears to be ready to back off, any new positions would be more oriented toward shorting. It would also create the analyzing of existing long positions with much more scrutiny, be in ready to take profits on signs of reversal signals. When these market conditions exist, the candlestick investor has a great advantage of being able to scan for the most profitable trades, whether bullish or bearish. Keep in mind, prices do not move based upon fundamentals, prices move based upon the perception of fundamentals. This is clearly identified using candlestick analysis.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

What dramatically improves your profitability? Knowing which direction the overall market is moving. That not only allows investors to move immediately when the candlestick charts on individual stocks are corresponding with the overall market direction, but it also provides a logical format for being in profit potential positions when the market does move favorably. Today, the premarket futures indicated a very strong bullish open. Numerous stocks gapped up, further confirming bullish patterns. However, the profitability of getting into bullish confirming trends was modified by having to pay higher prices the trades. With candlestick analysis, numerous position would have already been established based upon visible candlestick patterns, allowing for participating in the profitable gap up as well as further upside. A major advantage of candlestick analysis is the identification of when reversals are just starting. This produces better profitability obviously, for already being in positions as they are moving in the appropriate direction, especially when prices are gapping up.

The major indexes had been creating bullish J-hook patterns. Those patterns alone indicated there was going to be more upside. This produced a much more comfortable trading strategy for buying good bullish individual stock charts knowing that the overall market trend was in a bullish move. The J-hook pattern has been the predominant profitable trade set up. When the major indexes are producing J-hook patterns, it is logical that numerous individual stock charts will also be producing J-hook patterns. The advantage of utilizing candlestick patterns for a trading strategy is that all stocks will usually rise in a rising market. Candlestick pattern breakouts will produce much greater profits because of the excessive price moves expected from human nature as a pattern performs.

Chat session tonight at 8 PM ET with Guest speaker Dave Aquino. Click here to register.

Good Investing,

The Candlestick Forum Team

The graphics of candlestick charts reveal what everybody is watching. The 50 day moving average has acted as a support level once the Dow and S&P 500 broke up through that level. Although the candlestick formations are not revealing a tremendous amount of strength in the current uptrend, they do reveal the lack of any selling pressure. This implies bullish sentiment remains in control. This type of market environment allows for identifying the candlestick signals or patterns that are going to continue to perform with inordinate profits because of the lack of concern of the market selling off. Simply stated, strong candlestick patterns will continue to perform with exorbitant profits when the overall market trend is not showing any change.

The J-hook patterns are obvious profitable set ups due to the market in general creating the potential of J-hook patterns. Specific sectors, such as gold, is producing numerous bullish patterns because gold itself is acting strong. Finding the strongest bullish stock charts can be narrowed down by merely identifying which sector ETFs are producing the strongest signals. Today,LABU formed a kicker signal, breaking the price out of a basing area. This makes the biotech’s strong bullish prospects. Candlestick scans are greatly simplified by merely identifying the sectors that have the biggest upside potential. Then finding the stocks that have the best bullish charts puts all the probabilities in investor’s favor, putting all the stars in alignment.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

The graphics of candlestick’s make it much more clear to analyze whether a market is in a profit-taking/consolidation stage versus a full-scale reversal. After a strong bullish move last week, the Dow and the S&P 500 produced a gap up shooting star/Doji. This indicated the possibility of a reversal. Tuesday’s trading produced bearish confirmation. The Dow formed a bearish engulfing signal after the shooting star/Doji. But the graphics of candlestick analysis allow for a much more accurate assessment of whether this was merely profit-taking versus a full-scale reversal. Witnessing the type of trading that occurred as the Dow pulled back to the 50 day moving average made it much more evident that there was the lack of selling pressure. The 50 day moving average acted as a support level as the Dow traded in decisively at that level, a Doji day. Today’s positive trading was more evidence the 50 day moving average was going to act as a support level and produced the probability of a bullish J-hook pattern starting the next uptrend. Profit-taking was more evident in the indexes because the transportation index continue to trade higher. This illustrated there was not a mass selling consensus in the markets.

Knowing that the markets were not reversing after a good uptrend last week allows for participating in the high profit candlestick signals and patterns. The frypan bottom was still very evident in XON, illustrating a breakout of that pattern with a gap up. Simple scanning techniques allows the candlestick investor to pinpoint which sectors are probably going to act the best. As J-hook patterns are being produced in the market indexes, they can also be identified an individual stocks and sectors. Gold prices were showing bullish trading based upon bullish J-hook patterns, allowing for identifying which individual stocks in the gold sector were also producing strong J-hook patterns. Because candlestick signals and patterns are based upon reoccurring investor sentiment, they produce trade set ups that not only produce high probabilities of positive trades but also puts investors in trade set ups that produce inordinately strong profits.

The graphics of candlestick’s reveal much more powerful information about investor sentiment than any other technical charting. Today, the indexes traded positive again. The uptrend started with a very strong buy signal in the Dow, the best friend signal. Although today’s trading continued positive, the shooting star signal after gapping up on today’s open reveals the potential of a reversal/profit-taking level. Additionally, it is not unusual to see price movement, after breaching a potential resistance level, come back and test it to see if it will act as support. A lower open in the markets tomorrow would provide a high probability pullback to the 50 day moving average in both the Dow and the S&P 500. This would not necessarily indicate any major change of the current market uptrend but would be a high probability set up for some profit-taking to occur.

As the market continues higher, individual candlestick signal and patterns produce consistent profitable results. Not only are the results profitable, but the magnitude of the profits identified in candlestick patterns produce much stronger profit results. This is greatly beneficial to candlestick investors that recognize the reoccurring pattern setups that occur in human nature. Because candlestick signals and patterns create high probability trades set ups, it is not unusual to have a vast majority of a portfolio positioning working in the correct direction. This is not based upon any great stock picking ability, it is merely identifying how prices move based upon human nature.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team