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.
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Good Investing,
The Candlestick Forum Team
