Chapter 11

Using Technical Indicators to Complement Your Candlestick Charts

In This Chapter

bullet Taking advantage of trendlines

bullet Using moving averages to inform your decisions

bullet Appreciating the relative strength index

bullet Adding stochastics to your bag of tricks

bullet Jumping on the Bollinger band bandwagon

You can use nothing but candlestick patterns when trading, and some traders have proven that to be a profitable route. But that shouldn’t make you think twice about combining candlesticks with other technical indicators. You can take advantage of a wide range of indicators to confirm the conclusions you draw from your candlestick charts, and your results are often more reliable and profitable. You may very well find that you can’t live by candlesticks alone!

Many candlestick patterns — from single sticks to complex multiple-stick formations — depend on the market context in which they appear. For example, a bullish signal in a bearish market sparks skepticism and may even be ignored. But what ...

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