Candlestick Charting For Dummies, 2nd Edition

Chapter 12

Buy Indicators and Bullish Reversal Candlestick Patterns

IN THIS CHAPTER

Making successful long trades by combining the RSI and candlesticks

Using stochastic indicators and candlestick patterns for profitable long trading

This chapter clues you in on ways in which you can begin combining your trading tools to make your trades even more efficient and profitable. More specifically, the strategies I describe in the next few pages help you understand how you can use two buy indicators — the relative strength index (RSI) and stochastics — in tandem with bullish trend reversal candlestick patterns to pick the best times and situations for entering and exiting long trades.

I’ve found the two technical indicators I discuss in this chapter to be reliable and relatively easy to combine with candlestick patterns. But please don’t think for a second that the RSI and stochastic indicators are the only ones that work well with candlesticks. Several other indicators also work well; I strongly encourage you to research those indicators and find some that work best with your trading style.

Buying with the RSI and Bullish Reversal Candlestick Patterns

The RSI is a fairly reliable indicator that can tell you whether a stock or market is overbought or oversold. The RSI fluctuates between ...