Today, we're going to be looking at classic Japanese candlestick charts. Candlestick charts were first used in Japan over two centuries ago by rice traders to chart rice prices. This system of charting has been around for a long time and can be valuable to traders everywhere. Japanese candlestick charts are now widely available on the web and in most software packages.
Candlestick charting shows, in a very visual way, a powerful picture of what's going on in the markets. Candlestick charts use individual lines that look like candles, hence the name, and are comprised of a real body and shadows. There are a number of formations that take place, both bullish and bearish, that can provide traders with valuable information.
I first discovered candlestick charting during a speaking engagement in the early 90s in Japan. Up until that time, I had used traditional Western bar charts and point and figure charts, which I also like. When I first saw a chart that had been drawn in candlesticks, I was immediately hooked, as I could see how candlestick charts show a visual image of what is going on in any market. In this tutorial on understanding candlestick charts, you will see some of the most powerful setups and learn all about the various candlestick formations and how you can use them successfully in various markets.
This short video shows you not only classic textbook examples, but also real world examples. I hope you find the video lesson interesting and of value to your own investment knowledge.
Every success using candlestick charts in the future, Adam Hewison
As traders, we are always looking for a trading edge, but sometimes we can overlook the big picture and miss how we can change some fundamental ways in which we approach and make trades.
For myself, one of the key elements is to be disciplined in one's trading. I must say that it’s easy to say, but, it did take me quite some time to master this skill.
Often you want to justify your position, and you listen to someone else who thinks the same way you're thinking, even though you both could be wrong on the trade. When you follow that line of thinking you are doomed, as you tend to keep pointing to the other person and use them as a crutch for a trade that has gone bad. This can create bigger and bigger losses for your account so, much so that it freezes your brain to the point you can’t see other market opportunities. It also gets to the point where you say to yourself, "I’ve lost so much money I can't get out now." This is not the attitude to have if you want to be successful. The good news is there is an easy cure for that, and you must follow it if you are going to be successful.
The one easy cure for this is using stops in the market.
I used to listen to Ron Popeil pitching the Ronco 4000 Showtime Standard Rotisserie on TV and the keywords he always used to say after you put the chicken is was “Set It And Forget It."
I'm not sure if Ron Popeil ever traded in the markets, but his concept of “Set It And Forget It” can be applied to stops. Simply enter your stops and leave them there until either you are stopped out, or you have taken a profit on the position.
You can still take a profit on a position even if you get stopped out… You simply keep moving your stops up as the market moves higher. Doing so helps you lock in a profit when the market reverses. So use Ron Popeil’s “Set It And Forget It” philosophy for your stops. It could be the difference between eating chicken and having nothing to eat.
I was looking over the charts this past weekend and noticed one stock that I wanted to bring to your attention. There are two reasons why I think this stock is worth a look.
1. There was a new monthly Trade Triangle signal on June 27th at $48.04.
2. I like the formation. This chart has a "W" formation, which normally occurs at the bottom of a move and signals a reversal. In this case, it would look as though once we close over $48 a share, we could see a quick pop up to $50.
The stock I am referring to is Coca-Cola Enterprises Inc. (NYSE:CCE), traded on the New York stock exchange. This is a large company and has been around for a long time. While not usually considered a hot stock, the formation is undeniable. As with any position, you should always be using money management stops.
Hello traders everywhere! Adam Hewison here, President of INO.com and co-creator of MarketClub, with your video update for Thursday, the 6th of February.
Yesterday, the Coca-Cola Company (NYSE:KO) announced it was buying a 10% stake in Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR). Under the terms of the deal, Coke will purchase 16.7 million shares in Green Mountain for about $1.5 billion.