July 11th Market Direction

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