Candlestick Pattern Blogs, Candlestick Chart Pattern Formations

Friday, January 30, 2009

The Gann Studies

W.D. Gann was one of the most successful traders ever profited from stock and commodity market. He is known for his predictions regarding both financial matters and others, was a publisher of some of the most read books and was the inventor one of the most popular trading theories. In early 1920’s he opened two trading accounts, $300 and $150 accounts, and was able to make great profits; profit of $25,000 in three months from $300 account and $12,000 in one month from $150 account.

Thursday, January 29, 2009

Bullish Rising Three Methods Pattern

Rising three methods is a candlestick continuation pattern which indicates the continuation of a bullish trend even after a temporary halt in trading. It is a multiple candlestick pattern which include more than three candlesticks (ideally include five candlesticks); of which the first and last candlesticks are long bullish (white/colorless) candlesticks. The middle candlesticks may be all bearish (black/colored) or can be a mixture of bullish and bearish candlesticks. Bullish rising three methods is highly reliable when all middle candlesticks are bearish.

Wednesday, January 28, 2009

ETF Sector Rotation Strategy

Sector ETF (Exchange Traded Fund) rotation strategy aims at maximizing the return by buying and selling sector ETFs. This is an active investment management strategy and if successfully followed offers much more return than investing in single sector-based ETF. Sector ETF rotation strategy also offer greater flexibility as now there are a number of sector ETFs available (finance, services, industry, technology, energy, etc.) and also ETFs with different proportion of holdings are available with in a sector.

Tuesday, January 27, 2009

Before-Hours and After-Hours Trading

By definition trades executed before normal trading hours are known as before-hours trades and trades executed after normal trading hours are known as after-hours trades. Often these sessions are called off-hours trading and the most common practice followed during the session is crossing – the matching of buy and sell orders.

Monday, January 26, 2009

Stock Market Letter, 26 January 2009

The Week Ahead: General Electric with its multi-faceted business confirms the broad nature of the current economic decline with a 44% drop in Q4 earnings. The markets will digest a busy week of reports starting with existing home sales and leading economic indicators on Monday. The FOMC kicks off a two day meeting starting Tuesday leading to a decision on interest rate policy on Wednesday. The new home sales and durable goods data is released Thursday while Friday produces what could be an interesting final Q4 GDP report for the economy.

Friday, January 23, 2009

What is January Effect?

January effect is the tendency of stock markets to rise in the month of January. The tendency is more evident in first week of January. January effect is more evident in small-cap and mid-cap stocks and different stocks and markets are differently affected by the effect.

Wednesday, January 21, 2009

Bearish Falling Three Methods Pattern

Falling three methods is a candlestick pattern which indicates bearish market continuation even after a temporary halt in trend. This is a multiple candlestick pattern which includes more than three candlesticks; of that first and last will be long bearish candlesticks. The middle candlesticks can be all white (bullish or colorless) or a mix of white and black (bearish or colored) candlesticks. Reliability is highest when all middle candlesticks are bullish.

Weekly Stock Market Letter, 20 January 2009

The Week Ahead: Financial stocks are leading the way down again as large US banks struggle to re-invent themselves in a weak economy with Citigroup splitting in two and Bank of America reporting a rare loss. Inauguration Day on Tuesday will be the main theme this week as new president Barack Obama takes office. Thursday is the only other day of significance with housing starts, jobless claims, and oil & gas inventories released.

Tuesday, January 20, 2009

Good-Till-Date (GTD) Order

Good-Till-Date (GTD), also known as Good-Till-Time, orders are limit orders to buy or sell products, which - if not filled completely - remain valid in the market until a specified date. GTD orders suit long-term traders and investors who want to bye or sell stocks on reaching specific price levels and traders who lack time to regularly monitor price movements.

Monday, January 19, 2009

Advantages of ETF Wraps

Exchange Traded Funds (ETFs) wrap is growing in popularity. There are a number of reasons for it. Below are some advantages that ETF wraps offer over mutual fund wraps and other trading instruments.

Friday, January 16, 2009

What is ETF Wrap?

Exchange Trade Funds (ETF) wraps are getting increasingly popular now. These are investment programs offered by brokerage firms/money managers which involve solely investing in exchange traded funds. Like mutual fund wraps investments are made with respect to a pre-selected model/strategy. ETF wraps also involve periodical rebalancing of investments to achieve certain goals.

Thursday, January 15, 2009

Descending Triangle Formation

Descending triangle formation is a bearish triangle chart formation which is just opposite to Ascending Triangle Formation. It is usually a trend continuation formation when formed in downtrend; but also can be a trend reversal formation when formed in an uptrend. Descending triangle can be easily identified and the pattern is recognized by plotting two trend lines, a lower flat trendline and an upper declining trendline.

Wednesday, January 14, 2009

Fill or Kill (FOK) Orders

Fill or Kill (FOK) orders are market or limit orders which are either completely filled or are not filled at all. FOK orders are practiced to attain certain goals and are not so widely practiced. Fill or Kill orders are mainly placed by day traders and scalpers who wish to immediately buy a large number of stocks at a certain price and/or by arbitrators who want to complete more than one transaction simultaneously.

Tuesday, January 13, 2009

Forex Trading Using RSI

Relative strength index (RSI) is one of the most used indicators in forex trading. RSI can be used together with other indicators to enter and exit trades. Know more about RSI. In forex trading, RSI can be used for trading any currency pair for any time frame.

Monday, January 12, 2009

Weekly Stock Market Review Letter

The Week Ahead: The continued severe drop in unemployment now at 7.2% likely means its momentum will continue well into 2009 with both manufacturing and service jobs being shed. Reports to watch will be the trade balance numbers on Tuesday, business inventories on Wednesday along with the Federal Reserve's Beige Book, the Producer Price Index on Thursday, and December's Consumer Price Index and industrial production releases on Friday.

Friday, January 9, 2009

How to Calculate Cost Basis Accurately?

For accurately calculating cost basis (and the tax you are liable) you need to know at least five things; 1) the original amount you paid for the stocks and other instruments, 2) the date of purchase, 3) commissions and other fees involved, 4) how you acquired the stocks and 5) benefits if any, usually dividends, you got by holding the stocks. Your personal trading records, brokerage and bank statements, statements on dividend reinvestment and gift/inheritance records can help you in figuring out the above things.

Thursday, January 8, 2009

Ascending Triangle Formation

Ascending triangle formation is a bullish triangle chart formation. It can be a trend continuation formation when formed in an uptrend or trend reversal pattern when formed in a downtrend; the former is more reliable and common. Ascending triangle is an easy-to-identify pattern formed of two trend lines, an upper flat horizontal trendline and a lower rising trendline.

Wednesday, January 7, 2009

What is Cost Basis or Tax Basis?

Cost basis or tax basis is the original price of an asset like stock, bonds, property, funds, etc. This also includes purchasing costs like commissions, buying expenses, shipping costs and purchasing taxes. This original value is also adjusted for any appreciation or depreciation in value (including stock splits, dividend yields, return on distributions, etc) of the property. For tax purposes, cost basis is used for the calculation of capital gains or capital losses. Capital gains/losses are calculated by taking the difference between cost basis and current market value.

Tuesday, January 6, 2009

Weekly Stock Market Newsletter, 5 January 2009

The Week Ahead: Despite the countertrend rally that started November 21, the S&P 500 and Nasdaq Composite ended there worst year ever in 2008 while the Dow Industrials ended its 3rd worst in 112 years. The long term trend has begun to roll over in a way that markets haven't seen in two generations. 2009 opened strongly for the major indexes at the end of the holiday season last week, but may get a reality check ahead of the employment report this Friday.

Monday, January 5, 2009

Automated or Non-Automated Forex System?

In order to profit from the currency trading market the traders should use the most suitable forex trading system; to his trading style, trading knowledge and trading goals. Although not a well defined classification, forex currency trading systems can be classified into three distinct classes; automated forex systems, semi-automated systems and non-automated (do-it-yourself) forex trading systems.

Friday, January 2, 2009

Bullish Upside Tasuki Gap Pattern

Upside Tasuki gap is a trend continuation pattern, which indicates the continuation of prevailing uptrend, even after a correction (bearish) day. Bullish Tasuki gap formation includes two bullish candlesticks and a bearish candlestick, and is a relatively rare candlestick pattern

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