I swear by them and you'll not find a more reliable charting indicator than Japanese Candlestick analysis.
Amongst the myriad of techniques available to the trader today,candles are the most immediate and arguably, the most reliable and definitely the most fractal of all systems. I strongly believe in fractal systems when it comes to trading simply because anything too niche or specific tends to fail when the market change its mood. Non fractal systems also fail miserably when applied to other instrument or markets. Such systems need to be tweaked and adjusted constantly to adapt to the market conditions.
In a sideways or volatile market like we have today, indicators and oscillators are unreliable or at best, too slow no matter how fast a setting you program. Already tagged with a negative title of "lagging indicator", in today's market they don't only lag, they drag.
Fractal systems like candle, fibonacci, support and resistance all work in any market condition, rational or irrational and never need tweaking, adjusting or expensive software to run. In fact,they're free.
-They work on any instrument like equities, currencies, futures, bonds, etc
-They work in any time frame whether you're looking at monthly charts, weekly, daily, by minutes and even down to tick chart.
-They work in any economy be it in America, Europe, Asia and the like
Best of all, unlike most other systems, candles actually reveal the psychology behind the chart. They reveal emotions like doubt, commitment, fear, greed, confusion, euphoria, panic, etc. These are emotional indications that oscillators can never factor into their translation. And it is for this reason that candles are preferred.
So, are you ready to learn the candlestick? Here you go
Fundamental of technical analysis
As you can see, candlestick analysis is quite reliable but it is important to remember that in business of trading and investing, the market is too dynamic for absolutes. As reliable as they are, candles can fail with a little bit of news or macroeconomic influence.
Volumes are crucial factor that determines if your candlestick analysis is reliable. More liquidity makes for better reliability of your candlestick analysis...or any technical analysis for that matter.
Wish all Happy Hunting!
