Trading Technical Analysis - Enhanced Returns With Candlestick Signals
Trading with technical analysis is made much easier when an investor can better understand what the reversal indicators are revealing. Witnessing the Bullish Engulfing signals in the Dow during the past week and a half made for an easy interpretation of what investor sentiment was trying to do. These signals, occurring with stochastics in the oversold area, made analyzing the potential trend reversal that much easier to visualize.
The uptrend for the past five trading days has provided excellent returns. Being positioned correctly in this recent uptrend allowed an investor to participate in chart signals that have produced greater than normal profits. That is the purpose of using Candlestick signals.
Trading technical analysis is applying chart formations that have worked successfully in the past. Candlestick signals are a proven trading method. The signals have provided extensive profits for centuries. They are not just recently back-tested results. Utilizing Candlestick signals in conjunction with other techniques simply enhances the probabilities of being in a correct trade. Trading technical analysis should be putting all the probabilities in one's favor.
Correct trade ratios can be improved when applying Candlestick signals to more recently generated computer technical analysis. Moving averages, stochastics, Fibonacci numbers, and a slew of other technical analysis indicators can be better utilized on computer generated charts.
Whether analyzing individual stocks or the market in general, the combination of Candlestick signals with other technical methods greatly improves profit potential.