| p>There are various techniques used by traders and | | | | trading stocks. |
| analysts to help with market prediction. Most traders | | | | Some candlestick patterns that signal changes are |
| will use one type of technical analysis, while others | | | | the "morning star". This pattern follows a time where |
| will combine different techniques when trading on | | | | investors have been panicky and have been selling |
| the stock market today. The kind of analysis used | | | | out of fear over a period of time. The morning star |
| will depend on which school the analyst adheres to. | | | | appears and is noted by three candles, with the first |
| When a trader is stock picking, he will try to find out | | | | day's candle being black and long, showing that there |
| in which direction the stock picks are moving so that | | | | has been a strong down trend with the stock closing |
| he can get in at the best time to maximize profits. | | | | lower than it opened. The second day shows a white |
| One of the methods used in the stock market is | | | | short-bodied candle signaling indecision, and shows |
| technical analysis. This technique involves looking a | | | | that the trading range was low. The gap between |
| historical data on a stock pick. Normally the volumes | | | | the first day and second day further indicates that |
| and price are the main focus, but other data is used | | | | there is the probability that a reversal is occurring. |
| as well. | | | | The third day is a long white candle and this signals |
| Stock charts will be used to look at historical data; | | | | the bulls have taken control. |
| this chart analysis will generally be viewed looking at | | | | This pattern is a good indication of a reversal and can |
| candlestick patterns. The patterns that are formed | | | | be considered part of the market prediction. Traders |
| by the candlestick charts will show where trend | | | | will then give out advice and stock tips to investors |
| reversals may occur. Trend lines may also be used in | | | | so they they can buy in to the stock while it is |
| conjunction with the candlestick patterns. There are | | | | increasing in price. This is just one method of using |
| many patterns that can form, and each pattern | | | | candlestick patterns to determine the direction things |
| combined with other patterns will indicate a certain | | | | will move. There are actually 12 important candlestick |
| condition at a given time period. This information will | | | | patterns that can be used in market prediction, and |
| help with market prediction, which in turn helps when | | | | traders should familiarize themselves with them. |