The stock market is a living thing. It is continuously moving and changing. It is affected not only by the success of the companies that are listed, but also by its environment. When you are able to recognize stock price factors, you will be able to improve your performance in the stock market. If you recognize and understand these stock price factors, it will help you decide whether the price movement is a buy, sell or sit tight signal. Some of the things that can be stock price factors are business dynamics, market sector variations and market changes.

Business Dynamics
This is the most direct stock price factor for a company’s share prices. An economic change in the fundamentals of a business will immediately affect the price. In a form of business inertia, a stock that is on a strong rise with no decay in business dynamics will continue to rise as investors bid up the price of a hot stock. The opposite is also true, a company whose profits are flat or falling without a visible change in business dynamics will continue to fall as investors abandon the stock

Both directions are examples that reflect changes in business dynamics. Other changes can occur which have similar effects. These would be things such as negative cash flow, strategic acquisitions and the similar events. The idea is that underlying factors can be stock price influences on the company and its share value. Successful traders are the ones who are able to identify the stock price factors creating the price changes and react appropriately.

Market Sector Variations
Sector changes, especially in the cyclical stock sectors, can also be either positive or negative stock price factors. Cyclical sectors will typically react in a repetitive manner; because of this, when an entire sector rises or falls, even the companies in that sector not leading the movement will likely be affected as they are pulled along in the momentum of the sector’s movement. In an example that is both positive and negative, the Internet companies of the 1990’s are perfect pictures of stock price factors that are influenced by sector changes. Fundamental analysis in such instances becomes important as in investors attempts to determine if the stock price influences are a temporary move in the sector or an indication of a problem within a particular company or the entire sector.

Market Changes
It is good to remember that there is nothing certain about the stock market. The market will rise and the market will fall and that’s about that you can say with any degree of certainty. With market swings and their influence as stock price factors, it is important to have a stock trading system such as Japanese Candlesticks in place. A proven, powerful system such as Candlesticks can assist investors to chart movements in the market and determine whether they are going to influence stock prices and if so, what effect they will have.

Conclusion
The conclusion is somewhat simple. There are forces at work that serve as stock price factors. Being able to read these factors and translate the results into your stock trading plan is an important part of successful trading. Utilizing a system such as Japanese Candlesticks can help you to make correct reads on stock price influences and implement more profitable trades. The rest of the equation is how you read stock price factors and how they move you and your stocks.

Market Direction: The most important factor to remember about candlestick analysis is that it is based upon common sense. The human psyche has not changed since the beginning of mankind, especially when it comes to investing one's money, emotions have a very powerful affect when making decisions. Most investors try to learn investing all in one session. They overload their minds with the process versus trying to learn the rationale behind process. Candlestick analysis makes the learning procedure very easy to follow. Dissecting each of the signals allows an investor to clearly understand the investment psychology built into a reversal signal. Once that is learned, the process for analyzing price trends becomes very easy.

Using the candlestick signals as the building blocks for analysis creates an analytical format that is very logical to implement. Learning each of the additional analytical tools is more common sense applications. Stop losses, entry and exit strategies, analyzing support and resistance levels and identifying high profit patterns setups can be learned very quickly because of the visual facets built into candlestick signals. The summer time is an excellent time to concentrate on learning all the nuances of Japanese candlesticks. The markets usually slow down during the summer. Usually just a few sectors become highlighted during the summer. This allows investors to get a better mental handle on utilizing the signals effectively. The markets in general do not put as much pressure on trying to watch many price actions. The Candlestick Forum has just made available for training slides used in the Candlestick Forum seminar. The two day training is consolidated into a little over seven hours of instructions. You will miss the very humorous and informative jokes that Mr. Bigalow incorporates into his presentation. (He will be the first to tell you they are humorous jokes). You will also miss the different questions and answers that may have arrived when illustrated various points in a chart pattern. However, you will receive very concise and clear explanations of why candlestick signals work at specific locations of a trend without the fluff found in most seminars. Use the summer months to take advantage of this clear, step-by-step learning process in the comfort of your own home, by the swimming pool or during your vacation travels. The price is very attractive. Click here for the Houston training seminar special.

The direction of a trend becomes more obvious when you can visual interpret the information Candlestick Signals reveal. The analysis of the Dow is a perfect example. Where the stochastics? What could be the potential support level? What type of candlestick signals are appearing at important technical levels? What pattern can everybody else obviously be observing? The big advantage for the candlestick analyst is being able to evaluate what the signals are doing at those levels. The Dow pulled back and formed a bullish harami. That told us the selling had stopped. A few days later a bullish engulfing signal confirmed the buying. Indecisive trading appeared at the recent highs. The next pullback showed indecisive trading at the previous support level and now had the 50 day moving average as further evidence of a possible support level. The indecisive trading, in the form of Dojis, was a much more clear visualization that the 50 day moving average/previous support area was going to act as another support level.

DOW

CCOI

These observations are greatly enhanced with the simple knowledge of what candlestick signals are revealing. A Doji represents indecision. A Doji forming on a possible support level provides very basic results. Those results become easily identified by that candle formations that occur after the indecisive trading days. Our recent evaluation of the market supporting at the 50 day moving average was nothing more than analyzing what investor sentiment was doing. The simplicity of candlestick analysis creates a trading platform for an investor to be in the right positions at the right time.

Whether analyzing the markets in general or analyzing an individual commodity, which does not have market indexes to follow, the candlestick signals will make the visual analysis much more clear. Learn the probabilities! Learn how to interpret investor sentiment! Profitable investors take advantage of common investor sentiment. Most investors trade with the emotions. Candlestick signals exploit those emotions. You can easily convert from a losing investor to a winning investor when analyzing the charts that are formed by the losing investors. This is not rocket science.

There will be a member stock chat tonight at 8PM ET. There will not be a public stock chat on Thursday July 5, 2007.

Good investing,

The Candlestick Forum Team