Skip to Main Content
Candlestick Charting For Dummies®
book

Candlestick Charting For Dummies®

by Russell Rhoads
April 2008
Beginner to intermediate content levelBeginner to intermediate
358 pages
11h 48m
English
For Dummies
Content preview from Candlestick Charting For Dummies®

Combining Moving Averages and Bullish-Trending Candlestick Patterns

The moving average is a technical indicator that is reliable and easy to understand, at least as far as technical indicators go. See Chapter 11 for more info on moving averages.

In basic terms, a moving average is the average of the closing prices of a security over a certain period of time. Moving averages can be helpful when you’re looking to confirm a trend, so you can rely on them to boost your confidence in the trading decisions you make based on bullish-trending candlestick patterns.

Using moving averages with bullish-trending candlestick patterns to confirm trends

If you haven’t yet made your way through my discussion of technical indicators in Chapter 11 or you need a refresher, the first rule of thumb with using moving averages as trend indicators is if a security’s price is above the moving average, an uptrend is in place. With that in mind, take a gander at my first example of combining moving averages with bullish-trending candlestick patterns.

Charting the moving average and a bullish-trending pattern

Figure 14-5 is a chart of the stock for Yum! Brands (YUM). When you realize that Yum! Brands operates various fast food restaurants, including KFC, Taco Bell, and Pizza Hut, you can understand where it got its company’s name and stock symbol.

Figure 14-5: A chart of YUM featuring a couple of bullish-trending candlestick patterns and ten-day moving average that confirm an uptrend.

In Figure ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Candlestick Charting Demystified

Candlestick Charting Demystified

Wayne A. Corbitt

Publisher Resources

ISBN: 9781118051900Purchase book