When the market indexes broke out through a resistance level that everybody else could observe, the candlestick investor has the advantage of seeing the bullish signal that was indicating the resistance level was not going to continue to act as resistance. At that point, high probability trend indicators, such as the T-line, continue to confirm that the next wave to the upside was in progress. Although the indexes have had a few days of indecisive trading, profit-taking, the overall trend evaluation is simplified by knowing that as long as the indexes continue to trade above the T-line, the uptrend remains in progress. Having that information allows the candlestick investor to enter trades that have probabilities of creating high profit situations with the underlying factor being there is no major selling pressure in the markets.
The lack of any selling indications provide very profitable trade set ups. Uptrending stocks stimulated by belt hold signals, such as our position in GOSS, dramatically improves the probabilities of not only being in the right direction at the right time but in very strong price moves. Holding steady Eddie positions as illustrated in our recommendations on VSTO and CARB allows for participating in the high profit exuberance at the top of steady price trends. Human nature works the same way time after time. Learning what patterns are created by human nature/investor sentiment puts the candlestick investor in situations where the probabilities are not only extremely strong of being in the right direction at the right time but also establishing positions that will produce excessive profitability.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
