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CandleWavesm
What is
CandleWave?
“Jack be nimble; Jack be quick………..”
CandleWave is a method of technical
analysis of the financial markets which combines Japanese Candlestick charting
with several styles of wave analysis for the purpose of forecasting possible
reversals in market prices, primarily those of the major Indexes such as the S&P
500 and the Nasdaq Composite.
Is this just another form of
fortune-telling, crystal ball reading, or voodoo?
No. It’s
just common sense, plus a developed skill in interpreting the visual pictures
which are presented by the Candlestick patterns and by the wave patterns,
together, much as a cardiologist can read an electrocardiogram.
Why do you use Japanese Candlesticks?
Because the
visual information which they convey tell the story of the psychology of the
markets in a pictorial way which is instantly recognized by the eye and which
is much more complete than the simple open-high-low-close information which is
set forth in conventional bar charts.
What do you mean by “waves?” Are
they the figment of someone’s imagination, or are they real?
If you will look at a chart
of stock market activity, your eye will tell you right away that they are real.
The stock market really does move in waves; and it is our intention to ride
those waves for profit, both up and down. Other waves come into play too, such
as “Elliott” waves and waves within the various indicators themselves.
Are the Candlesticks intended to
supplant or override “Western” indicators such as the Stochastics, RSI, MACD, or
ADX?
Absolutely
not. The Candlesticks are specifically used in perfectly harmonious conjunction
with all of the “Western” indicators, the result being an even more powerful
predictive capability. The Candlesticks shine in their ability to foretell
reversals of trend. They do not foretell the extent of a price move.
Is CandleWave a form of
stock-picking?
No. We leave stock-picking
to those who are good at it.
Why does CandleWave focus on the main
Indexes?
For several reasons: 1) It
allows us to focus our attention, rather than searching for likely individual
candidates for reversals; 2) They have proven to be good vehicles for adaptation
to the CandleWave method of analysis; 3) They (via exchange-traded funds and
various widely-traded bull and bear mutual funds) are highly liquid; 4) They can
be considered as relative Proxies for their component securities.
Does CandleWave suggest that an
investor be either always long or short, one or the other?
No. There will be times
when the next direction of the market appears uncertain, and that it may be
prudent in such instance to let funds sit safely in cash or equivalent for the
time being, earning interest all the while.
Does CandleWave propose to be an
investor’s sole investment and trading vehicle?
Certainly
not. In the present economic climate and outlook, we suggest that an investor’s
available investment funds might be allocated along these general lines: 1) 50%
in cash or Treasury bills; 2) 25% in highest-grade stocks and bonds (very
conservative investors may choose to reduce this allocation and, instead,
allocate the funds to cash or Treasury bills); 3) 20% with CandleWave’s
recommendations; 4) 5% in special situations, as they may appear to the investor
or as may be recommended to him or her by others.
If CandleWave suggests a particular
trade which turns out to be successful, will it be quick to call for an exit?
No. We will quickly
suggest exiting a bad trade, but will strongly suggest letting a winner run. We
will also suggest the interposition of trailing stops as conditions may require,
in order to lock in profits.
Nothing in these pages is to be taken
as personal investment advice.
Subject to Terms of Use; Disclosure and
Disclaimer; Conditions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
CandleWave, LLC
906 Whippoorwill Drive
Palm
Harbor, FL 34683 USA
info@CandleWave.com
Copyright 2007 CandleWave,
LLC. All rights reserved.
The name "CandleWave"
and the CandleWave logo are service marks of CandleWave, LLC.
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