Candlestick investing has taken the trading world by storm. In fact the use of candlestick charts far supersedes any other form of charting by leaps and bounds. It’s safe to say that if you’re still using a bar chart, line chart or any other type of chart you are likely way behind the times.

Candlestick Investing refers to how a person views a chart to make long or short term trading decisions. A line chart is simply a line that marks the closing price of the session. A bar chart prints the open, close, high and low but not quite like a candlestick chart.

Candlestick investing has swept the western world because the average Joe can learn what the charts are saying with little effort. Its almost like comparing old Xrays with the likes of a CT scanner. Seeing things in 3 dimensions always works better.

One of my favorite patterns is the “morning star doji” pattern. When we think of a morning star we think of “sunrise” or UP, this is a bullish reversal pattern. This pattern has 3 candlesticks. The first simply continues the previous down trend. next we get the Doji star, a candlestick who’s open and close are rather close to each other.

Then price gaps up and closes to at least the half way point of the first candlesticks real body. This is the “morning” sunrise if you will. Its telling us the bears have lost steam and the bulls are taking over, if only for the short term.

Candlestick investing requires that you be aware that the forecast provided may only be for the short term, a careful risk plan and entry plan needs to be in place to take advantage of any potential move that may occur.

If you are going to dive in and learn candlestick investing techniques, be sure to study other forms of analysis that pinpoint price strength or weakness and pull these sources together for an even more accurate picture of what price is telling us.

I like to use multiple time frames to get consistent perspective on price strength and weakness. I then use candlestick patterns to help me pinpoint weakness or strength.

The best part about learning how to use candlestick charts is that when you begin to learn the techniques you can with just a quick glance see exactly what price is doing, there’s no guessing. Try it yourself and see learn just 1 or 2 patterns begin to look at candlestick charts regularly and you will likely be amazed.

When you get used to identifying these patterns you will quickly recognize when price is demonstrating that a potential reversal or continuation is near. Quickly identifying these areas is the key to low risk high odds trade entry.

If you trade now don’t even hesitate in learning these techniques now. You really shouldn’t trade again until you at least have some candlestick investing knowledge. You’re crazy to ignore this proven information.

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