Even when the markets are not showing any decisive direction, simple candlestick scans can identify which sectors are producing the strongest trends for long positions or the weakest trends for short positions. As illustrated, good strength has been coming back into the electric vehicle sector for the past few weeks. This allows investors to be establishing positions in stock/sectors that produce the highest probabilities of producing profitable trades. This is not rocket science! This is merely identifying the candlestick signals and patterns the Japanese rice traders identified over the last 400 years. Human nature works the same way time after time. Not only does candlestick analysis identify when it is time to be buying, it also identifies when it is time to take profits. There are only six bullish candlestick signals and six bearish candlestick signals that need to be identified. These are considered the 12 major signals. They produce 99.9% of the profitable trades. This keeps from having to learn all 50 or 60 signals that don’t occur often enough to expand mental time and energy to learn them.
The frypan bottom pattern is being witnessed in the electric vehicle sector. A pattern, in conjunction with the T line creates very good probability analysis. The T line/fry pan bottom rule – you can stay long after witnessing a frypan bottom breakout as long as price does not close back below the T line. These are the simple trading rules utilizing the affects of human nature that allow investors to keep their emotions out of their trading decisions. The candlestick signals and patterns have expected results. The T line can confirm the results. This combination allows investors to gain control of their own investment perspectives, dramatically reducing emotional decisions.
Good investing,
The Candlestick Forum Team
