Finding the best stock picks requires an understanding of technical analysis and chart analysis, to better your stock market prediction abilities. However, it is important to remember that there is no fool proof method to making money in the stock market. However, we can use certain tools to help us while we are trading stocks. A very good tool for technical analysis is using candlestick charts. These stock charts provide excellent information and give a good picture of how a stock has been trading. They are easy to interpret and contain detailed information. They are highly regarded as the more superior tool when it comes to technical analysis.

The information is presented in the form of a candlestick with wicks at both ends. These wicks are called shadows. The candle stick may appear in black or white, and the length of its body varies, as do the shadows. All these features provide the user in his or her stock market prediction with vital information when combined. For example, the top and bottom ends of the candle body represent the closing and opening price of the stock. When combined with a color, it determines the relation to the stocks open and close price. A black candle means that the stock closed lower than it opened. A white candle means the stock closed higher than it opened. The length of the shadows or wicks shows the high and low prices reached while the stock was trading.

Then there is a candlestick with a very short black body, and next to it is another white and tall bodied candlestick that engulfs the smaller one in size. This tells us that on the first day (Black candle), the stock closed lower than it opened, and because its short, that means there was not a lot of selling. The second day (White candle), tells us the stock opened below the previous day’s closing price, but it also closes higher than the first day’s close. This means there was more buying on the second day with the price rising higher. This pattern is called Bullish Engulfing and shows the bulls were out on second day.

There are a number of other patterns that will be observed in the stock charts. These combined patterns allow the investor to see trends and predict where there will be a swing in the market or stock. A stock market video can show you how to read candlestick patterns. This kind of technical analysis will allow you to stock pick more accurately by being more accurate with your stock market prediction. When you become more familiar with using candlestick charts, you will find stock picking get easier and faster. There are other tools and methods that when all combined, will help your stock market prediction abilities become more accurate and effective, to the point where you might be you giving stock tips to your broker.