ne of the first things you learn in the trading world is to learn about the different patterns and candlesticks that are available to investors. The stock markets have many patterns as well, and learning them can take you from being a novice investor on the market floor to an experienced trader standing at the top of his game. There are actually stock market chart patterns that show exactly when a stock has peaked and has started to decline. These are known as tops and bottoms. Learning these patterns can help you make money by selling your stocks before they start to decline.
The same goes for the futures and Forex markets. There are candlestick patterns that show when a security is ready to rise and when it is ready to drop. Knowing the timing of these peaks and dips will give you an idea if you need to buy or sell your securities. This means you can start to develop a strategy before you invest so that you are not blindsided by what you see on the charts.
As an investor, you want to be able to make informed decisions about what stocks to buy. There are some investments that you should never even consider, no matter how much they may appear to be. There are times when investors jump into the market and make foolish decisions that end up costing them their entire investment capital. Study market data and patterns before you invest so that you can avoid making the same mistakes. It does you no good to be a smart enough investor and succeed in the markets, if you do not know when to quit.
There are three top 10 stock chart patterns you should always be aware of. They are bullish, bearish and reversal patterns. The bullish candlestick pattern shows that a stock has been rising and is expected to continue to rise. A bearish candlestick shows that the stock is falling and the trend is predicted to soon reverse.
An uptrend top candle indicates the stock is on the rise and is likely to continue climbing. A top candle will also have a replacement price. On the other hand, the downtrend top candle signals that the stock is falling and the trend is predicted to soon reverse. You should know that there are different candles for every type of market.
What makes these top 10 stock chart patterns so important to know is that the stock market is very complex. You can only learn so much about it by studying it and analyzing its behavior. By studying a candlestick pattern, you can determine which way a stock is going to move and then you can take action. If the pattern is bullish, you should buy because the market will likely rise and if it is bearish, you should sell.
bullish: This bullish pattern describes a stock that has been recently trading up. This means it is a stock you want to get in at the top before it starts to move downward. To make money from this pattern, you buy low and sell high.
Bearish: This is the opposite of the bullish top candlestick pattern. A stock that has been recently trading down is considered a bear. Therefore, you want to sell when the stock is heading down and buy when it is rising. This type of pattern is not as profitable as the bullish one, but it can result in much larger profits if you can find a top 10 stock that is in a downward trend.