Home » Candlestick Charts » Candlestick Patterns » Candlestick Charting Combined With Technical Indicators Can Be Highly Profitable

If you are into day trading or swing trading then you must know two things, technical analysis and candlestick charting. Both of these tools are a must if you want to become a winning trader no matter what market you like to trade or what contracts or instruments you want to trade.

Candlesticks have been used by the Japanese rice traders over the last few centuries to make a fortune. In the last two decades, candlestick charting has become popular in the western trading community. The reason is simple, no other chart form can describe the market action as clearly as the candlestick charts.

Now, as a trader the most important things that you should be able to know and predict is when the new trend is going to start, when the present trend is going to reverse itself, whether the present trend is going to continue or reverse itself. Candlestick charts and candlestick patterns are ideal in answering these type of questions.

However, if you combine candlestick patterns with technical indicators, it can become a highly powerful combination.

There are many candlestick patterns. There are simple candlestick patterns like the Doji, Hammer, Shooting Stars, Hanging Man etc. Then there are complex candlestick patterns like the bearish and bullish Engulfing Patterns, the Three Soldiers Patterns and so on. As a trader, you need to confirm the trading signal. So when these candlestick patterns appear, it is an important signal that either the trend is about to reverse or it will continue. You can use technical indicators to confirm these signals that will make them even more accurate.

There are many technical indicators like the simple moving averages, exponential moving averages, pivot points, fibonacci retracement, ADX ( average directional index), MACD ( Moving Average Convergence Divergence), stochastics, RSI ( Relative Strength Index) and so on.

To tell you truth, in the beginning, you might get overwhelmed by the number of technical indicators that are available. What you need to do is to choose only two or three and then master them. One should be a trending indicator and the other should be a ranging indicator. I think, mastering three indicators is the best for you. Don’t go for more than three indicators.

Now why you need to master these trending or ranging indicators? These technical indicators can give you signals on the trend reversal as well as trend continuation. These technical indicators can tell you when the market is overbought or oversold. Candlestick patterns also give signals on trend continuation and trend reversals.

So when you combine the indicators with these candlestick patterns, you can get a good confirmation that the trading signal is accurate.

Candlestick charts can alert you on the trend reversal that you can then confirm with the help of technical indicators. In the same way, you can use candlestick patterns to confirm trend continuation with the help of technical indicators.

Mr. Ahmad Hassam has done Masters from Harvard University. Master these highly profitable Candlestick Patterns with this FREE 82 page PDF Candlestick Guide. Get these 3 Swing Trading Systems FREE.

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