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Candlesticks on Steroids

May 20th, 2008

I see that the domain name "Candlesticks on Steroids" has been reserved.  What a great domain name! The candles are great tools all by themselves, but they are even better predictors of future price direction when they are enhanced by one means or another. While the candles are good at seizing upon profit opportunities when trends change, they offer little by way of psychological analysis of the reasons behind the change. Programs which focus on the psychological aspect of market action can significantly enhance the value of the Japanese Candlesticks,, in that they can serve to predict changes in trend even before they begin to occur. That’s where the real benefit arises – being able to get into a trade before the trend changes, so that you will have the advantage of the total price move. True, not every trade works, and you will lose an option premium every once in a while when either the reversal doesn’t happen, or it happens after the term of your option expires. That’s one reason to buy an option with plenty of time remaining, even though you think that a reversal is imminenjt.

Entry Filed under: Miscellaneous