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Current market conditions make it difficult even for the most experienced trades. On one hand we have rising unemployment and spending cuts, on the other - stock market recently has gone up more than long term average. It's difficult to buy more shares with economic climate so grim, yet it's even more difficult to sell shares when they're still risising. So what can a small investor do? How to profit from today's market when media often report contradicting business news? One method used by experienced traders and investors is recognizing market action with candlestick patterns. In fact, candlestick patterns have been used hundreds years ago in Japan to trade rice, but they are being successfully used by thousands of traders in USA. A candlestick pattern is nothing more than graphical represeantion of market's actions for the last couple of days. If the stock market went up during a day – a candle representing that day is painted white; if the market went down – the candle is black. Certain types of candles laid out in a certain way create a candlestick pattern and some patterns happen more often than others. So how can you profit from candlestick patterns? This process can be divided into 3 main parts: Learning the patterns. You need to know what to look for in candlestick chart. Most of the time the market does completely meaningless things, but sometimes a major top or bottom is reached in well researched and know pattern. Best way to learn candlestick patterns is to use numerous website on the Internet, just remember you need to backtest the patterns on historical market quotes. Recognizing the patterns. Some pattern have special meaning in a down market, some only in an up market – first you need to recognize what type of market you're in and them search for particular pattern. Unfortunatelly, this is the hard part - you need to look at charts carefully, nothing will substitute well trained trader. Placing the trade. This part is quick and easy, but some traders find it very frustrating and often miss a trade out of fear. You can't fear the market – if you have done your homework and you know what you're doing – you'll be fine. Just remember to use stop loss orders to limit your risk (there is always risk when trading stock market). That's it! There is absolutely no reason to listen to market-gurus on tv who don't know any better. Learn how to trade using candlestick patterns, prepare a trading plan, stick to your stop losses to limit your risk and you will be a successful trader. If you want to learn more about this subject I strongly recommend checking out my candlestick patterns site. There is lots of information there including historical candlestick patterns' performance and new material is often added.
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stock market, market research, candlesticks, candlestick charts, technical analysis,
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