The Japanese Candlesticks are Only Half a Loaf
Each author who writes on a technical subject has his or her own particular points of beginning as well as different outlooks and styles of presentation of the material. There are many good textbooks which explain in great detail the construction of the various Japanese Candlestick patterns as well as their trend-reversal predictive qualities. Some textbooks by certain authors point up the desirability of combining the utilization of standard "Western" Indicators with Candlestick analysis per se, in order to obtain a better understanding of the psychology which underlies investors' and traders' buying and selling decisions. In particular, those authors whose offerings also include seminars and forums tend to emphasize the total compatibility between the Candlesticks and the "Westerns."
This effort often proceeds to the point of suggesting that the student incorporate into his analytical process the "Westerns" which he is accustomed to using and which he has found to be of the greatest value to him - but the suggestion stops there, without very much specific instruction involving particular Indicators. There seems to be something missing, in that the student is pretty much left to his own devices. Perhaps even more importantly, the full interplay between the Candlesticks and the Westerns, and the synergism between all of them, is never fully brought to the fore.
So, the Candlesticks alone, while a truly remarkable tool, are only half a loaf; and the Candlesticks plus only a passing or partial reference to the Westerns is just a shade better. The complete interplay between the Candles and the Westerns can best be shown by a computer program which affords the operator the opportunity to compare the Candlestick presentation with all of the Westerns which his heart may desire.
When that is done, the complete picture emerges, and the operator can come to a more complete understanding of the market psychology at work in any time frame; and the Candlesticks are elevated, celebrated , and brought in the direction of perfection as the finest foundation of technical analysis of the financial markets.
Related Tags: technique, plan, star, reversal, analysis, forum, instruction, commentary, candlestick, pattern, candlesticks, formation, investment newsletter, japanese candlesticks, japanese candlestick, market letter, market newsletter, evening star, bullish engulfing
The author is an experienced investor; a retired attorney and corporate CEO; and the creator of the "Candelaabra" technical analysis system for use in all financial markets. He publishes his free investment newsletter three times per week at http://www.candlewave.com
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