Be Your Own Governor

Licia Leslie

Hi Shoppers,

James Madison said, “Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.”

As traders we are our own Governors, right?

Working for ourselves.

No one was breathing over our shoulder.

Relying on ourselves for discipline, hard work, and improvement.

So we should always be learning, doing research, and studying those charts in order to be better traders and make more money.

I have just a few main points or reminders on how and why we use Japanese candlesticks to gauge the market or a stock’s next move and how to profit from it.

Remember two things move the market: fear and greed.

The Japanese Candles tell the story of a stock’s future move.

The candle formations detect changes in trend, changes in market psychology and provide opportunities for profit if we read them correctly.

The colored part of the candle or the real body, when longer and within the trend, shows the strength or weakness of the trend.

Spinning tops (small real bodies) show bulls and bears battling it out and creating indecision.

Spinning tops in a coiling consolidation or box range are gearing up for the next leg lower/higher.

High-wave candles (long shadows) designate total confusion.

Long real bodies are called belt-holds:

Refers to sumo wrestling when you push your opponent out of the ring while holding onto his belt
Small or nonexistent shadows – if there are shadows (upper on the green and lower on the red) takes power away from the candle
The longer the body the more powerful the direction change as one side has taken complete control of that session
Very powerful near support/resistance lines
Also be stronger if they haven’t occurred in the recent chart
Higher volume always adds conviction to any formation
When found at the top/bottom of a trend can signal a change in that trend.
Green at the bottom of a downtrend and red at the top of an uptrend.