Online Stock Trades - Candlestick Charts in Technical Analysis
Stock Market Candlesticks
When studying candlestick charts or any type of technical analysis you first need to ascertain whether the chart you are looking at is in a trend - either an uptrend or a downtrend, a sideways trend doesn't count - in the DOW or S&P500 or whatever stock market chart you are looking at.
You also need to look for patterns - either bullish reversal patterns (such as a morning star), or bearish reversal patterns (such as a shooting star) or continuation patterns followed by confimration. There are no guarantees but using candlestick patterns can put the odds in your favour.
Finally bear in mind time frames - in technical analysis, candlestick patterns are only valid for around 1 to 6 candlesticks. So that if you re looking at 5 minute candlesticks then any reversal only holds for the next 1 - 6 candlesticks. Similarly if you are looking at daily candlesticks, only candlesticks for the next 1 - 6 days should be looked at.
Check out this excellent Youtube video posted by the guys at yourtradingcoach.com
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