Learning how to utilize candlestick signals effectively is relatively easy. It’s all visual. When did the market indexes start showing bearish sentiment? That can be easily detected by going back and finding the strong candlestick sell signal and a close below the T line. How do you assess what the policies and arguments of Washington DC is going to affect the market trend? You can’t! But candlestick charts reveal how the overall investor sentiment is reacting to different tweets or soundbites coming out of Washington. The major benefit of candlestick analysis is it immediately illustrates what is occurring in the investment sentiment’s of the market trends and/or specific stocks and sectors. The bearish left/right combo in the Dow chart and the close below the T line illustrated a strong change of investor sentiment of the previous uptrend. Candlestick signals have been identified and utilized by Japanese Rice traders over the past few hundred years to show exactly when a trend is starting or ending. The probabilities of analyzing trend movement successfully are dramatically improved knowing how investor sentiment is graphically depicted. Having short positions in the portfolio’s over the past four weeks of trading produced great profits by merely being in the correct direction of the markets trend and stock trends based upon a powerful T-line rule. A candlestick reversal signal and a close below the T-line dramatically increases the probabilities of a downtrend until witnessing a candlestick buy signal and a close above the T-line. This is based upon excessive analysis for many centuries demonstrating the effects of investor sentiment. The short positions have produced very strong profits.
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Good Investing,
The Candlestick Forum Team
