Stock market investing strategy using candlestick signals
What is the best stock market investing strategy? The strategy that consistently puts the probabilities in the investor’s favor. Candlestick signals can be applied to produce the best stock market investing strategy for the day trader as well as the long-term investor. Candlestick signals contain investor sentiment that is simply common-sense investment analysis in a graphic form. What are the elements of a stock market investing strategy that most investors lack? A platform for demonstrating when it is time to buy and when it is time to sell. Fundamental research tries to find the companies that have a long-term positive prospect. Good management, good earnings growth, and an industry that has growth potential. Unfortunately, most fundamental recommendations do not have any timing element. Candlestick signals can dramatically improve the returns for a fundamental stock market investing strategy. Buying a good long term position at the wrong time can diminish overall returns dramatically.
A stock market investing strategy for most technical trading methods utilizes indicators that illustrate what investor patterns/perceptions have produced as far as price patterns in the past. These trading techniques usually rely upon ‘assuming’ reversals may occur at specific levels. Candlestick signals greatly enhance a stock market investing strategy by eliminating the “assumption.” If a price is expected to reverse at a major technical indicator such as Fibonacci numbers, trend lines, or moving averages, candlestick signals can provide a huge benefit. The best stock market investing strategy results from not just expecting a reversal to occur at a certain technical level, but being able to actually interpret correctly what investor sentiment is doing at those levels. Candlestick signals produce a powerful insight into a change of investor sentiment. Being able to evaluate what is actually happening at a technical level, versus needing a few days to confirm that a reversal has occurred, creates a very profitable advantage.
A perfect stock market investing strategy is having immediate confirmation at important technical levels. The candlestick signals create a double benefit. It provides immediate recognition that a reversal is occurring, allowing investors to get in to a trend at its earliest stages. It also provides lower risk stop-loss strategies. One of the biggest problems most investors encounter is their own ego. If they have made a decision to buy a position, because of their mental prowess, it becomes very hard to close a position that does not work. Candlestick signals create an excellent format for stop-loss procedures. Simple logic dictates the closer the entry point after a candlestick buy signal, the smaller the price move against the position for executing the stop-loss. Stop-loss procedures, using candlestick signals, are very simple. It takes all the emotion out of coming back out of a trade. If the candlestick buy signal was the indication that the buyers were now in control, prices coming back down through that signal would immediately tell us that the bears were still in control.
All investment professionals advise us to cut our losses short and let our profits run. But did you ever notice that they never tell you how to do that? The candlestick signals make that very simple to implement. The Candlestick Forum provides a highly informational e-book on how to use candlestick signal stop-loss procedures correctly. Of course, all investors want to be in winning trades. But reality shows us that not all trade
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