Commodity swing trading is usually considered high risk investing. That is not necessarily so when utilizing candlestick signals. A major advantage that commodity swing trading has over stock swing trading is the consistency of a trend move. Commodity trends usually work in a more consistent fashion. The reason is very simple. There are less outside influences on a commodity price than there is on a stock price. Most commodities are affected by merely supply and demand. This makes commodity swing trading a little easier to implement than stock trading. Whereas a swing trade in stocks may be a 2 to 10 day trading period, commodity swing trading might experience holds of 5 to 20 trading days.

Stock prices have many more influences with which to contend. The market move in general, interest rates, crude oil prices, the US dollar, and a multitude of other influences that may change the trend of a stock price. Candlestick reversal signals provide excellent points to be buying in stocks. The reversal signals work that much better with commodity prices. Commodity swing trading gains the benefit of seeing where a reversal will occur and then knowing the new trend should provide a steady move from that reversal.

Keep in mind, Japanese candlesticks signals were developed with the most basic of commodities, Rice. Learning how to utilize the 12 major candlestick signals is the first step for putting investment funds into high probability trades. Commodity swing trading has the advantage of steady price moves as well as price patterns. The same patterns that are utilized in stock trading, such as the Jay-hook pattern, the scoop pattern, the cradle pattern, etc. work equally well with commodities. Learn the 12 major signals and you will understand where the high probability buy and sell points will be. Once you have become familiar with the signals, then move on to learning price patterns. Price patterns while incorporating candlestick signals dramatically improve the probabilities of being in high profit trades. Click here for the 12 major signals training CD special.

The profits that can be produced in commodity swing trading are extremely large. The risk of trading high leveraged trading entities becomes minimized when knowing what the candlestick signals are revealing. They produce a confidence to buy at the bottom and sell at the top. They also clearly demonstrate where a stop loss points should be placed. Having this knowledge allows an investor to take advantage of any trading market. Participating in the right direction at the right time is very critical in commodity swing trading. As illustrated in the soybean buy signal, the Bullish Engulfing signal, late last week created the opportunity to be in to a very profitable trade.

July Soybeans

Market Direction

Both the Dow and the NASDAQ failed their major moving averages. The Dow was going to come back up and tests the 50-day moving average once more but showed a Doji on Friday followed by strong selling on Monday. The first indication early last week of coming down to test the 200-day moving average is now back in the a valuation. This coincided with a failure of the NASDAQ at the 200 day moving average. Both now have their stochastics turning back down. Keep in mind; this is the evaluation of investor sentiment at important technical levels. As of now, all indications are that prices are going to move down to the next important technical levels.

DOW

Learning commodity trading signals will open the door to profits in trading commodity futures. Commodity and Futures Training using Candlestick chart patterns allows traders to learn what Japanese rice traders knew centuries ago. The market can tell you what the market will do if you learn how to read the commodity trading signals. There are a dozen Candlestick patterns that traders should commit to memory and another 28 that can reliably predict market behavior. Candlestick charting techniques have a long and successful history of predicting commodity market movement. Candlestick trading tactics are like most tactics derived from technical analysis. Candlestick basics predict market activity and the trader either buys or sells commodities based on the insight derived.
Successful commodities traders start with a solid foundation of fundamental analysis of the commodity or commodities that they trade. There are reasonable limits to prices on a commodities exchange. Knowing where these limits are will help guide successful commodities trading. Within the extremes technical analysis tools can give solid commodity trading signals. Major Candlestick signals include the Doji, Bullish Engulfing, and Bearish Engulfing signals. Candlestick chart analysis can also be done with time honored commodity trading signals such as the Tri Star Pattern, the Three Black Crows, the Three Identical Crows, and the Two Crows patterns. All of these are secondary patterns typically indicating market reversals. A Commodity and Futures Training class will help the beginner learn both the fundamental and technical aspects of the commodities markets.

Commodity trading signals can be useful to both the companies buying commodities or the producers in hedging investment risk. Trading signals may be more useful to traders who routinely buy and sell commodities or who trade options on commodity futures. Although those hedging risk in the commodities markets may buy and sell once or twice a year the trader can and will watch the market throughout the year and throughout the day looking for commodity trading signals that will lead to profit. The addition of traders speculating on commodity prices adds volume and liquidity to the market leading to more traders trading and increasing volume. It is with high trading volume and liquidity that commodity trading signals work the best and are most profitable when followed.

Technical trading works best when applied through a trading strategy. The trader will learn with time which trading signals can be used to make the most profit. With experience the trader can learn more and more efficient execution of the trading strategy. The trader will learn which commodities he or she trades most effectively and which trading signals derived from Candlestick charts are most predictive of market changes for the commodity in question. With competent instruction the trader can learn effective use trading signals coupled with the use of techniques such as Candlestick trading tactics to make consistent profits. At the same time proper reading of market signals will help reduce risk while enhancing return on investment. For those interested in trading options on commodity futures a good choice is to take options training with Stephen Bigalow.

Market Direction

Investor sentiment is the force that moves prices/markets. Candlestick signals reveal the nature of investor sentiment. The signals work extremely well on their own. However, an investor can glean an immense amount of information utilizing candlestick signals and the other obvious information a chart is revealing. Today, the markets experienced a severe selloff on the open. This made for further confirmation of the possible reversal in the trend if you include the Evening Star signal that formed in the Dow last week. How does one know whether it is time to close out long positions when the market opens lower like it did today? They don’t! But they have to take a look at what was affecting the trend to this point. The tee line has acted as support for this uptrend for the past two months. That fact has to be put into the evaluation.

The longer a trend remains in existence, the more severe the reversal signal needs to be. Recently the markets have been reacting to positive or negative earnings reports on a daily basis. The overall trend has remained consistently above the tee line. The severe selling on today’s open was scary. However, up to this point, the trend had been fairly solid. It is prudent to not react until the daily signal confirms there has been a change of investor sentiment. As was witnessed today, the buying came back into the markets after about one hour of languishing near the lows. The intraday charts should have been utilized to see what the trend was doing. If the five-minute chart demonstrated a lengthy flat trading range, there is extreme hurry to close out the positions. They are probably already trading off after the selloff. If the markets appeared as if they were going to close at the low end of the trading range by the end of the day, then you could be selling those positions, probably at approximately the same level as were they were trading one hour after the open.

DOW

If the Bulls step back in, as they have done for the last two months, and close the markets above the tee line, a very simple assumption can be made. The uptrend is in progress as long as they cannot close it below the tee line.
Waiting to see what investor sentiment is doing after any price opens becomes a very prudent entry and exit strategy. As seen in the TLEO chart, it opened positive. It also started selling off immediately from that level. What should be witnessed after a candlestick buy signal? Continued buying! In the case of TLEO, there is nothing wrong with waiting one or two minutes to see if the buyers are still participating after the price opens positive following day candlestick buy signal.

TLEO

@How the markets closed today would be very important for indicating what was occurring an investor sentiment. Obviously a close at the lower end of today’s trading range would reveal the tee line had not acted as support. You do not have to buy at the absolute bottom or sell at the absolute top. Your entry and exit strategies should include practices that improve the probabilities for profiting from that trade.

No Chat Session Tonight due to Traveling

Good Investing,
The Candlestick Forum Team

Hot penny stocks are those stocks that trade from .001 of a penny to $5.00. They are extremely risky yet they have remarkable reward potential. Penny stocks are referred to as over the counter stocks because they are listed on the Over the Counter Bulletin Board.

To qualify as a penny stock, the stock must meet four criteria.

1. The stock must be priced below five dollars.
2. The stock is not traded on a national stock exchange or on the NASDAQ.
3. The stock may be listed on the “pink sheets” the NASD or the OTC Bulletin Board as explained above.
4. Lastly, the company that issues the stock must have less that $5 million in tangible assets and must only have been in business less than three years.

Many investors buy penny stocks considered “hot penny stocks” because it does not take a large investment to get started. They give the average investor the opportunity to obtain a significant number of shares without having to invest a large chunk of their hard earned money. In other words it provides the successful trader the ability to turn a relatively small investment into a large fortune. This is precisely why hot penny stocks are so popular. The downside of course is that the volatility of shares and the lack of corporate transparency that can quickly make a penny stocks worthless.

It is important to note that the true value of a company and the price of their hot penny stocks are not always necessarily indicative of each other. In fact, most penny stocks are at the developmental stages and have been overlooked by the investment community for reasons unknown. While this has given penny stock investing a bad reputation, there are those penny stocks that truly represent a legitimate investment opportunity. Those are the best penny stocks that you need to find! There are actually studies that show that many companies have standards that they must meet before they are allowed to be traded OTC. The ones that you must watch out for are the companies that are unethically managed. These are the so called hot penny stocks that that are promoted and then quickly sold off to make a profit. By the time naive investors have bought them, the hype has worn off and they cannot sell them. Watch out for these schemes!

There are also those situations when companies are well established and are still considered to have hot penny stocks. These are companies that are truly trying to grow so that they go above the penny stock status and can potentially be traded on the NYSE or another major exchange. These businesses truly opt to increase their customer’s value in the stock market.

Hot penny stocks contain an element of risk just like any other type of investment. The point is that you must build your list of penny stocks very carefully. Do as much research as you can, and think twice before investing in a hyped up penny stock. There are penny stocks worth investing in, but it is up to you, the investor to find them.

Stock price analysis lies at the root of profitable stock trading. Stock traders profit from buying stock, selling stock, trading stock options, and trading futures on stocks. Traders profit from the price difference between entering a stock position and exiting. Thus stock price analysis is essential. Long term investing relies upon an analysis of the margin of safety of a stock and intrinsic stock value. However, buying a promising stock that has already run up in stock price can greatly diminish profits. Thus stock price analysis can be as important for the long term investor as it is for the day trader. Both long term investors and traders can profit from the use of Candlestick analysis. This easy to read technical analysis tool allows traders to execute trades with a high statistical probability of success without falling prey to the twin stock market trading demons of fear and greed.

Stock price analysis can be carried out with the long view in mind and with an eye towards minute by minute day trading profits. A conservative investor may wish to have a couple of dividend stocks in his stock portfolio. Using stock price analysis he will often buy these stocks when interest rates are high because the stock prices of dividend stocks will commonly be low at these times. When interest rates fall the investor will have the choice of continuing to receive dividends or selling the dividend stock at the now-higher stock price. On the other hand the day trader will commonly use Candlestick stock charts in order to anticipate short and medium term stock price fluctuations. Although the long term investor will commonly prefer a very stable and predictable stock the trader will commonly look for stock volatility and market volatility which picking stocks in search of short term trading profits.

It is common for successful investors to use technical analysis tools such as Candlestick patterns in choose if and when to purchase a stock. The long term investor will look for stocks with strong forward looking earnings potential as well as the margin of safety that cash in the bank and unencumbered physical assets represent. However, such stocks are often highly priced as investors are willing to pay for the promise and security that the stock offers. Thus an astute investor will often pass on such otherwise promising stock after seeing its high price to earnings ratio or high price to sales ratio. Here is where tools such as Candlestick pattern formations come to the aid of the long term investor. Even very stable and successful companies see their stock prices fluctuate during stock market crashes, rumors of mergers and acquisitions, or news of a new product coming out from a competitor. By using Candlestick signals for stock price analysis the long term investor will commonly be able to gain market insight during times of high price volatility and successfully purchase the stock in question on a short term correction. Whether one is interested in long term investing or trading for short term profits, stock price analysis with Japanese Candlesticks gives one a high statistical probability of success without the confusion and mistakes that the psychology of trading can bring about.

Market Direction

Has the downtrend reversed? Has the candlestick signals revealed reversal signals? Although the markets are still in a slow down trend, there have been candlestick reversal signals being formed at these levels. That is providing valuable information. It is visually revealing that buyers are starting to step in at these levels. There are very simple strategies that allow investors to be positioned correctly if a transition in the market trend is starting to take place. 

Private training sessions – August 2011 – It is often asked what are the benefits of attending a private training session. There is a definite benefit to learning candlestick signals and patterns and the related factors surrounding candlesticks that produce consistent profits. These private training sessions, consisting of three or four traders being instructed by Stephen W Bigalow allow for very concise demonstrations and answers to one’s personal questions. Have you ever gone through a training session where your questions were quite answered to where you fully understood? And then the remaining portion of the training session was a little bit hazy because you weren’t fully understanding a specific aspect? A private training session consists of two solid days of viewing and understanding how candlestick analysis works effectively. You will not be provided with information that you have to figure out how to use correctly. You will be instructed in how to use candlestick signals correctly. You do not believe the training with any un-answered questions in your mind.

When you see how candlestick analysis is derived from common sense investment practices, your concept on how to invest correctly is completely altered. You will understand how to buy at the bottoms when everybody else is selling and selling at the tops when everybody else is buying. You will learn how to scan for the high probability/high profit trades. You will learn how to automatically set your stop loss procedures without having any emotional attachment. The learning process is not a “drum into your head” memorization process. Stephen Bigalow shows you how to interpret high profit trading patterns as a natural visual perspective. What makes it even better is the learning environment. The teaching process is done on a porch reviewing charts while also enjoying the clear waters of Keuka Lake, a beautiful Finger Lake of New York State. Breaks do not consist of getting a drink at the water fountain in the hallway of a stark hotel. Breaks at these training sessions consist of taking a dip in the cool and refreshing waters of the lake. The learning process does not end away from the computer screens. Investors can continue to ask questions and get answers from Mr. Bigalow at some of the best wineries in the nation or at dinner in a historic hotel restaurant overlooking the lake.

When you finish a candlestick training session, you will have gained a completely different perspective on what makes consistent profits in the markets. You become a controller of your investments versus the markets controlling you. Do not miss this opportunity to gain valuable insights into the most proven investment program in the world. The nuances of 400 years of candlestick observations, when conveyed to you in very pleasant surroundings, allows you to go home and make consistent returns. These training sessions are an excellent getaway for bringing your spouse and having them enjoy the attractions of the New York’s Finger Lakes region. Seats are obviously very limited. We will have this item posted in our site on Friday.

Chat session tonight at 8 PM ET. Everyone Is Welcome.

Good Investing,

The Candlestick Forum Team