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Stock Technical Analysis Tools

 

Candlestick signals have become one of the most powerful stock technical analysis tools for finding high profit trades. This is due to one basic element. The candlestick signals are the cumulative knowledge of investors' decisions right now. This information greatly enhances the ability to evaluate all stock technical analysis tools. Most technical analysis is based upon the anticipation of investor sentiment performing in the same  manner as in the past. Most stock technical analysis tools are based upon the 'anticipation' of something occurring at specific points of a trend. Candlestick signals reveal exactly what is going on at those points. Applying candlestick signals to other technical analysis creates a strong combination for being in the right trades at the right time.

Using candlestick signals in conjunction with other technical analysis helps to identify high probability trade situations. Although the signals work extremely well on their own, witnessing their formation in the development of specific price patterns allows an investor to capitalize on low risk, high profit situations. If a pattern is developing, that usually performs a high probability scenario and an investor is provided with a number of advantages. First, the signals provide a better visual alert for a pattern formation in its beginning stages of development. This enables an investor to enter a trade at the most optimal points. The definition of an optimal point is entering a trade at the best price level. Of course, this allows for greater profit potential but it also establishes a trading format for the least amount of losses. Logic dictates that if a trading pattern is developing, producing an anticipated price performance, if that pattern is immediately negated, an investor can get back out of the position with a very small loss.

Additionally, the patterns being used as stock technical analysis tools also provide the investor with expectations. The price should perform in a certain manner because that pattern is recognized because of its previous price movements. What could be deemed as possible resistance levels, such as might be experienced in the Scoop pattern and the Jay-hook pattern, may now be recognized as areas for possible strong price movements if that level is breached. Other stock technical analysis tools such as stochastics may be disregarded when utilizing the elements of a pattern. The candlestick formations forming at specific price levels now become an indication of whether that pattern is performing as expected.

Being able to recognize specific patterns or general patterns in the markets is very important. Wouldn't you like to participate in trades where the probabilities can already be predetermined? That is exactly what the candlestick formations help an investor to do. This is not a difficult process. Technical analysis is based upon the assumption that prices move in waves. Being able to identify the results of those waves/patterns greatly increases the correct trade ratio.

The Candlestick Forum provides highly informational but concise training CDs on high profit patterns. They are easy to learn. Once an investor's eye becomes acclimated to the visual recognition of some simple patterns, the candlestick investor can take advantage of some very large price moves. 

 

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