Home > Lessons from the trading floor > Stock trading tips: candlestick charts

Stock trading tips: candlestick charts

Every month in NYC we host a meeting for online stock traders. Some of the attendees are fulltime stock traders some do it as a hobby. If you would like to attend the next meeting, sign up here There is a massive difference between trading for a living and trading as a hobby. There is no pressure to find a good trade that will help pay your mortgage or rent if you have a full time job.

It was during our last meeting that one of the traders who is a full time teacher was relating a story about making a trade in $220 stock that he got off a one minute chart, the entry signal was a DOJI reversal. I think it was great for him that the trade worked out, but entry signals (in this case one candlestick from a one minute chart) must be taken in context of the bigger picture.

Candlestick charting was intoduced by Steve Nison and has many devoted followers and I will tell you I teach using them in my training program. The main point I want to make here is that they are not gospel that something is definitely going to happen. The candle is showing you the most immediate battle betweeen supply and demand. It is NOT showing you the trend. The trader I am speaking of was swearing the stock bounced $3 because of a one minute DOJI. Candlestick charting works, but keep it in the perspective of the big picture.

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  1. April 14, 2008 at 7:14 pm

    Has anyone used Japanese Candlesticks for swing trading? I have used them for about a year now and have been very successful.

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