Japanese Candlestick Trading Strategy

http://hitandruncandlesticks.com/japanese-candlesticks/japanese-candlestick-trading-strategy-2 Japanese Candlestick Trading Strategy Winning traders develop and use a strategy in order to successfully trade stocks, commodities, or currencies. Trend trading, scalping, range trading, or using a contrarian view of the market each can be a profitable trading strategy. A Japanese candlestick trading strategy can be used in conjunction with any or all of the above approaches. The key to a Japanese candlestick trading strategy is that one uses a Japanese candlestick signal to spot and confirm a trading opportunity. When clear Japanese Candlestick trading signals occur, a candlestick trader commonly profits, and when they do not occur, a candlestick trader does not trade. Candlestick Trading with an Eye on Fundamentals Many stocks and other equities tend to trade within a given range. When the range is well established, a good Japanese candlestick trading strategy is to use technical analysis with Japanese Candlesticks to confirm the turning points of the range or channel. A trader may have a good understanding of market fundamentals. As such he knows general values of the upper and lower limits of a stock price under current market conditions. However, knowing fundamentals does not tell the trader the precise point at which the market will turn. Using candlestick signals as a guide, traders can enter and exit trades at the most opportune and profitable moments. A viable Japanese candlestick trading strategy is to piggy back candlestick trading onto a clear view of market fundamentals for enhanced profits. Technical Analysis with Japanese Candlesticks Technical traders know that the market quickly discounts the fundamentals. As such many candlestick traders simply watch market price patterns. When clear and easy to read Japanese candlestick trading signs such as the Doji Signal, Hammer Signal, or Shooting Star signal appear, trading can be virtually mechanical. Recognize the signal. Verify the signal. Confirm the signal. Trade the signal. Technical trading with Japanese candlestick signals gives traders a clear view of changes in market sentiment and a distinct advantage over many other traders. With a Japanese candlestick trading strategy, traders gain insight into the composite actions of all traders and investors, namely market sentiment. A commonly used Japanese candlestick trading strategy is to not worry about market fundamentals and to simply use clear and easy to recognize candlestick signals as a path to trading profits. Rational Trading A Japanese candlestick trading strategy helps traders avoid the twin trading demons of fear and greed. Far too many traders become overly optimistic in a rising market or pessimistic in a falling market. With the Doji Signal, Hammer Signal, Shooting Star Signal and others as guides, traders avoid falling prey to prevalent market psychology. They commonly profit from the irrational actions of other traders who are driven by emotions of the moment. Use Japanese candlesticks to recognize potentially profitable trading situations. Patiently read the evolving signal. Confirm the signal. And trade to profits using a Japanese candlestick trading strategy. There are trading situations where the likelihood of profit is strongly in favor of the Japanese candlestick trader. Look for these situations using candlesticks. http://youtu.be/vRX1UMwiDs0

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