www.CandleStickForums.com
Successful Trading System
What constitutes a successful trading system? Certainly a successful trading system is one that results in profits in trading stocks, trading commodities, trading futures and trading options. A stock trading system at its most basic is a set of rules, an algorithm, for deciding when to buy stock, sell stock, or sell short. A successful trading system can be applied to stocks, options, commodities and futures. A basic stock trading system is based upon technical analysis of stock prices and provides buy or sell signals. There are lots of trading systems. A truly successful trading system such as Candlestick analysis stands the test of time. Japanese Candlestick basics have been around since the days of the Samurai in Japan. Although rice traders in ancient Japan were fully aware of the fundamentals that drove rice prices, such as a good harvest, a drought, war, etc., they also learned that price patterns repeated themselves. By identifying these patterns and learning what the pattern was likely to indicate, traders developed Candlestick signals such as the Doji Candlestick which is a strong indicator of market indecision and predicts the reversal both upward and downward market trends.
A successful trading system must be one that the trader can use effectively in stock trading, commodity trading or trading derivatives. A distinct advantage of Candlestick charts is that they are easy to read. Candlestick stock charts display the same information as other, more difficult to read, charting methods. However, Candlestick signals distill the same essential information into each signal without displaying complicated, statistics that take valuable time to read. No matter how accurate a trading system is the system must be functional in the rapid paced world of day trading stocks, commodities, and derivatives.
9. Although rice traders in ancient
Japan were fully aware of the
fundamentals that drove rice prices,
such as a good harvest, a drought,
war, etc., they also learned that price
patterns repeated themselves.
10. By identifying these patterns and
learning what the pattern was likely
to indicate, traders developed
Candlestick signals such as the Doji
Candlestick which is a strong
indicator of market indecision and
predicts the reversal both upward
and downward market trends.
11. A successful trading system must be
one that the trader can use effectively
in stock trading, commodity trading
or trading derivatives.
13. Candlestick stock charts display the
same information as other, more
difficult to read, charting methods.
14. However, Candlestick signals distill
the same essential information into
each signal without displaying
complicated, statistics that take
valuable time to read.
15. No matter how accurate a trading
system is the system must be
functional in the rapid paced world
of day trading stocks, commodities,
and derivatives.
16. A broader view of a successful
trading system includes time
management, management of
investment risk, choice of trading
hardware, choice of online trading
software, and routine reviews of
trading results.
17. In a successful trading system
picking stocks that are routinely
profitable to trade may be just as
important as skill in technical
analysis of stocks.
18. Exerting discipline in executing
trades according to a pre-determined
trading strategy is as important as
setting up the strategy.
19. Traders who maintain discipline and
use an efficient tool such as
Candlestick pattern formations to
analyze the market will commonly
have a successful trading system.
20. By using Candlestick signals in day
trading or in long term investing it is
possible to profit from buying at the
bottom of a price curve, from
anticipation of market reversal, and
from the market volatility that often
follows sudden changes in stock
fundamentals.
21. And, although it is not the most
glamorous aspect of successful stock
trading, routine analysis of trading
results leads to profitable
modifications of trading systems and
increased long term profits.
22. No matter how skillful a trader is at
fundamental and technical analysis
he can always improve.
23. By evaluating each Candlestick trade
after the fact a trader can commonly
improve his use of the system and
his profits leading to an increasingly
successful trading system.
