Chapter 15
Combining Technical Indicators and Bearish-Trending Candlestick Patterns
IN THIS CHAPTER
Using trend lines in tandem with bearish-trending candlestick patterns
Trading with a combination of moving averages and bearish-trending candlestick patterns
In this chapter, I explore the ways you can use trend lines and moving averages with bearish-trending candlestick patterns to uncover promising trading opportunities. Those two versatile types of technical analysis methods are great for detecting downtrends, and when you pair them with bearish-trending candlestick patterns, you may find it much easier to pick the best spots for entering short selling trades. And as though that weren’t enough, you can use that potent combination to determine when it’s time to cover your short position and (ideally) pocket a profit.
Combining Lines with Candles for Confirmation
Trend lines are among the most straightforward technical indicators. If an uptrend is in place, a trend line has a positive slope. If a downtrend is the order of the day (or week or month), a trend line has a negative slope. This concept sounds simplistic, but it can be hugely helpful when you’re trying to determine a market’s trend. If that trend turns out to be down, you can use a downward-sloping trend line alongside ...
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