Utilizing Candlestick signals can help an investor develop a highly profitable commodity trading system. Japanese rice traders used the signals to develop the first commodity trading system. The Honshu family successfully traded the rice markets centuries ago.
Commodities are easier to trade than stocks using Candlestick signals. The reason is simple. There are fewer outside influences to affect commodity prices. A successful commodity trading system can be implemented through simple visual analysis.
The signals used in conjunction with simple confirming indicators such as stochastics produce a high probability commodity trading system. As illustrated in the July Wheat chart, when the price of Wheat was an oversold condition, a Bullish Harami illustrated the time to buy.
The trend of a commodity will usually remain steady in one direction until the stochastics indicate an extreme condition, either overbought or oversold. Applying Candlestick signals to the trend analysis in these extreme conditions makes for a very simple commodity trading system. The probabilities become highly in the favor of the Candlestick investor.
Note how July Wheat started its uptrend when the stochastics were in the oversold condition. A Bullish Harami/Spinning Top was the reversal signal at the bottom. July Wheat now is approaching the overbought area. The indecision, Spinning Tops and Doji's, indicate less conviction to the upside. A Bearish Engulfing signal today should signify that the uptrend.
The Candlestick signals make for a high profit commodity trading system because of the immense amount of investment information provided in each of the signals. Prices move based on investor sentiment. Use this information to your advantage. The 12 major signals can make trading commodities extremely profitable.
