Trading stocks through chart analysys.....?

Question

does anyone here use candle stick patterns ect to make consistant gains and if so what should i be looking for, thank you.

Answer 1

Yes.  Buy the book "Candlestick Charting for Dummies". Using this, in combination with knowing what's going on with the market, the stock's industry sector, and with leading companies in their category will work for you.

Answer 2

One has to use a combination of charts to get the full picture. A stock can be cheap, but no support so it will keep going lower. It's not an exact science but more often than not one should be able to buy near the bottom to make a minimum pretty good profits. Candlesticks offer no value for 3 months or longer unless one is shorting because every one I studied for a year went down in value or sideways.

Answer 3

Candle stick patterns are useful in helping to identify trends but not as the basis for picking your stocks. It is a complicated tool. I recommend, "Japanese Candlestick Charting Techniques" by Nison. Borders has it in stock. Fascinating history behind candlesticks.

Answer 4

I disagree with the comment here that you can not trade stocks successfully through chart analysis.  There are plenty of trading systems and methodologies that only focus on using charts for the basis of entering and exit trades.  The key is to develop a methodology that suits your own personality and financial situation, and have the discipline to stick with it through thick and thin. If you can do that, you will profit consistently.

Candlestick charts are just one way of looking at it.  Learn to apply various candlestick patterns within the context of whether a stock is trending or not, and you can develop a system for trading pretty easily.  

Scott Cole

www.kungfutrader.com

www.theultimatestocktradingsystem.com

Answer 5

If you believe in any form of efficient market theory, trading stocks based on charts is completely ineffective. Think of it this way: if charts actually indicated reliable buy and sell signals wouldn't everyone be successful at trading stocks?

Research tends to support the EMT, however traders generally use a combination of stochastic charts and trend lines. Stochastics supposedly indicate when a stock is overbought or oversold by using price change and volume- thus you are supposed to buy when it is oversold and sell when it is overbought.

Again using "chartology" is generally ineffective. Its best to use technical analysis to supplement fundamental analysis and choose an entry point in a strong company.

Answer 6

You should pick a stock using fundamental analysis then pick your entry and possibly your exit point using candle sticks or other technical analysis. Check out stockcharts.com for a good education on technical analys.