Why Candlesticks?
The charts above illustrate how candlestick patterns can signal significant reversal points in the historical performance of a stock. While consistent success is not guaranteed in every trade, it is evident that candlestick charting and analysis are effective tools for market timing and analysis in both stock and commodity markets. Candlesticks offer visual insights into prevailing market psychology. The application and interpretation of candlesticks in technical analysis are based on specific principles:
1. The "what" (price action) takes precedence over the "why" (news, earnings, etc.).
2. Current prices reflect all available information.
3. The buyers and the sellers move markets based on psychologically driven emotions of fear, greed, and hope.
4. Market prices may not always represent the intrinsic value.
Traders can use either fundamental analysis or other methods of technical analysis together with the candlesticks as decision criteria. The message inherent in candlesticks, however, is more important since they give insight to what the market is thinking and must never be neglected. Candlesticks offer the unique opportunity for the early identification of reversals which enables our system to establish the stop loss and confirmation levels in time.
Candlesticker.com is a completely free resource offering comprehensive information on all candlestick patterns. Additionally, the site features performance tables for each pattern across global markets covered by the Bulls.com© family of websites, presented in an easy-to-read format. The other Bulls.com© family websites utilize the same database and algorithm as Candlesticker.com, displaying results similarly; however, these results are accessible exclusively to subscribers. These performance tables are essential, as they highlight which patterns yield the highest trading profits in specific securities and stock exchanges.