Over the past year and a half, the most volatile commodity traded has been oil. After rising to record highs at over $75 a barrel in 2006, the prices dropped below $50 and then began rising again. While such volatility can be dangerous for the investor, it also presents great opportunities for profit to the successful traders that know what to do and where to look when using signals for day trading oil.
It has been stated that 80% of all futures trades end in failure. The question behind this statistic is “why?” Commodities can be difficult to predict and there is a lot of volatility but what is the underlying reason for so much failure? Commodities trading require the proficient use of a good trading and investing system which can point out signals for day trading oil and many people simply don’t use a good system.
This is where the Japanese Candlesticks method enters the picture. Colder than normal weather….warmer than normal weather. Calm in the Middle East….war in the Middle East. These are the types of things that can drive oil prices drastically up or down. It is crucial to correctly interpret signals for day trading oil. It takes discipline to study the charts and perform technical analysis, and Japanese Candlestick signals are at the heart of the perfect search.
Technical analysis is the assumption that current prices are representative of the sum of all known information concerning the markets. The price of a stock not only reflects clinical facts, but it also represents the emotions and the “feelings” of a particular moment. Profit-taking, skepticism, greed and fear are all tangible factors when dealing with the markets because the markets can move based on emotions as well as facts. An expert in the market tries to remove the emotion factor from all decisions and base decisions on the candlestick chart formations, assuming that the prices reflect all variables.
The question at this juncture is how to use candlestick signals for day trading oil futures. A simple bar chart can follow the open and close of a particular type of oil; what it can not do is help you to see the signals for day trading oil. The main factors of candlestick chart patterns can be applied to align the elements of successful option trades; signals, stochastics, market direction, etc. A few simple processes can be employed that will exploit the same factors that make other option investors lose money to put money into your pocket.
These factors are:
Direction
As you learn candlestick signals for day trading oil, you will notice that you are more accurately able to assess the trends in the market. When all the essential indicators line up for a successful option trade, the signal showing strong commodity trading, the stochastics below the 20 line, further confirmed by a bounce off a trend line, and overall market direction, etc., the best option trading system can be executed. If you are able to successfully read the absolute bottom signals, your signals for day trading oil just got a lot more profitable!
Magnitude
Understanding the signals for day trading oil also means being able to understand the potential magnitude of the price move. The status of the stochastics should indicate how long the upside move can potentially be maintained. The analysis of the upside is going to dictate the ultimate trade strategy. And this has to incorporate the final signal?.time.
Time
Time is a misunderstood component in the signals for day trading oil. You might be saying to yourself, ?I?m going to move today?s purchases tomorrow, how could time even be a factor?? Signals for day trading oil will focus less on the time between buying and selling and focus more on where you are in a particular movement. Remember, you want to buy at the absolute bottom and sell at the top of a cycle; anything else and you?re taking money from your own pocket. Because of this, candlestick signals are still a strong ally to day trading. By understanding the patterns, signals for day trading oil can be much more profitable as you find the extremes in a movement. Candlestick option trading programs have been developed to make “high” risk trading into a very low risk procedure.
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