Using Trendlines and Bullish-Trending Candlestick Patterns for Buying and Confirmation
The trendline is one of the oldest and easiest to understand of all the technical indicators. You’d be hard pressed to find any current charting software that won’t draw a trendline automatically for you, but you can also hark back to the good ol’ days and draw a trendline yourself with nothing more than a chart, a ruler, and a pencil. If you need to get familiar with trendlines or brush up on what you already know, flip back to Chapter 11.
Trendlines have a positive slope during an uptrend or a negative slope during a downtrend, and those simple signals can be very useful when you’re trying to confirm your opinion of the market trend.
In this section, I show you how to use the trend confirmation that trendlines provide in combination with bullish-trending candlestick patterns, which signal that a trend in place will continue. You can use the combinations to decide when it’s time to buy to enter a long position or when you should stick with a trade to realize additional profits.
Using trendlines and bullish-trending candlestick patterns to pick long entry points and confirm trends
Because trendlines are so useful for trend confirmation, you can trade with confidence when you combine bullish trendlines with bullish candlestick patterns. That tandem can help you decide when to stick with a position or initiate a new one.
It’s pretty obvious where a trendline should be drawn on a chart, but sometimes ...