Chapter 8

Candlesticks and Momentum Indicators

Now that we know the extra layer of insight that candlestick charting can provide, let’s go a step further and show the synergy that can be achieved by combining candlesticks with momentum indicators. A momentum indicator is used to measure the rate, or velocity, at which price moves up or down. Momentum indicators can be computed over short-term, intermediate, or long-term time frames, which means they can be used in virtually any time frame that a trader prefers. These versatile indicators can be used in conjunction with candle patterns to spot trades that have higher probability for success than if each method were used on its own.


In this chapter, you will

• Understand the ...

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