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Candlesticks with International Stocks / Markets

 

 

 

Candlesticks can be used in international stock / market trading just as effectively as in the US markets. The inherent psychology associated with the construction of candlesticks makes it suitable for application in stocks/commodities/currencies and various openly traded markets.

 

 

Candlesticks depict investor sentiment in any given time frame. They are a visual window to the battle between the bulls and the bears. The emotions that control the bull and the bear are the same, regardless of city, state or country. Human emotions do not change. Investors react the same way to panic and greed, no matter which market is being traded. The chart below shows Tata Steel company, being traded on the Bombay Stock Exchange of India.

 

 

The uptrend is seen starting with a Morning Star signal in oversold conditions. The stock gaps up the next day creating an excellent buy situation. What does the gap up suggest? It suggests bulls want to desperately get in the stock. The investor sentiment has turned hugely bullish. Notice later on, we have a Dark Cloud signal. What does one need to see to make a decision? Confirmation selling!. The stock gapped up the next day and formed a Bullish Harami indicating the selling had stopped. This should have kept the candlestick trader still in the trade. The correct exit point would be to sell on the gap down confirmation of the Bearish Harami in overbought condition.

 

 

Learning candlestick signals and patterns the correct way can prove to be invaluable for your trading / investing success.

Chart courtesy stockcharts.com