What are Candlestick Charts ?When trading stocks it is useful to have some sort of method on which to base your trading decisions. One method that many experts use is technical analysis using Japanese candlestick charts. Candlestick charting will allow you to spot market reversals relatively accurately. One problem that you come up against however when using candlestick charts is that there are around 50 different patterns that can be used.
Experts (such as Stephen Bigalow) however, say that there are only around 12 candlestick charting signals that occur regularly, which makes using candlestick charts more feasible.
The most common candlestick chart signals are :-
- The Doji
- The Bullish and Bearish Engulfing Signal
- The Hanging Man
- The Shooting Star
- The Hammer
- The Bullish and Bearish Harami
- The Dark Cloud Cover
- The Piercing Pattern
- The Morning Star and Evening Star Signals
- The Kicker signal.
A Japanese candlestick "buy" signal in an oversold condition will give an extremely high probability that the trade will be profitable, but adding other indicators such as stochastics around 20 or below, moving averages, Fibonacci numbers, trendlines and trading channels etc... will make them even more accurate.
Fro a video of a trder's use of candlestick charts see - stock charts for beginners
For more details about the basics of Japanese Candlesticks - see Candlestick Charting
Other candlestick charts patterns : Piercing Pattern
See also : stocks and shares for beginners
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