Combining Moving Averages and Candlestick Analysis is “Profit-Making Magic.”
I recently added quite a few “new and improved” innovations to the so-called “classic” Japanese Candlestick methodology. Through more than three decades of intense study and analysis of candlestick patterns, I discovered a set of entirely new candlestick trading techniques which make the basic methodology even more powerful.
Case in point? Check out his new free video training entitled “The Profit-Making Magic of Candlestick Patterns at Major Moving Averages.”
When certain candlestick patterns form at specific major moving averages, it does almost seem that magic happens… in the form of unusually large short-term gains as the trading trend drastically reverses.
In my new training video I explain:
- Why Candlestick signals combined with moving averages result in a higher number of money-making trades
- The 3 major moving averages that most, if not all, money managers use to make decisions about their portfolios
- Why the moving averages are very important trend indicators and how they can be used to generate more profits
- How using Candlestick signals along with the major moving averages can identify the ultimate buying and selling points
In this free training video, I reveal strategies and techniques heretofore known to just a handful of traders in the world. You’ll begin to crave these types of situations, because you’ll know that they often lead to exciting, portfolio-enhancing short-term profits.
Using Candlestick patterns, along with the moving averages in a much different capacity, creates a trading program that produces highly profitable trades. The trades are also provided with a much greater frequency. Fortunately, the use of the moving averages is very simple. Once applied to Candlestick charts, it makes the analysis of where a trend may support or resist a very simple visual process.
Moving Averages as Support
When witnessing a downtrend, how do we tell when a bottom is getting near? It could be when panic selling is witnessed coming into a price trend as the stochastics are getting toward the oversold area. That is a helpful alert but it does not give us a roadmap to where panic selling might end. If you are able to utilize the 50-day moving average and the 200-day moving average as important support areas then those levels can at least be used as a target.
Also, when you are able to evaluate the potential target that a trend may want to go to now, it makes the analysis of what is going on in the Candlestick formations that much easier to interpret. For example, if a sustained downtrend is now showing larger candles, the evidence that the panic bottom may be nearing and the price is approaching one of the major moving averages provides extra preparation for seeing what might occur at that moving average level. Panic selling, along with stochastics approaching the oversold area or being in the oversold area, and a major moving average approaching a level where a Candlestick buy signal has a probability of occurring, becomes a trade set up that an investor wants to start preparing for.
Do all charts work well with moving averages? Definitely not! However a large majority appear to. The purpose of Candlestick analysis is to provide an advantage for the investor to see what is happening at important technical levels. The Candlestick signals provide that clarity. If a chart is not providing patterns that make it easy to see what a price movement is going to do, then move on to another chart. There are many from which to choose, especially with the availability of easy-to-use computer scanning programs.
In putting all of the probabilities in favor of the investor, using every technical method can be enhanced when Candlestick signals are applied. How do you discover whether the major moving averages are a positive correlation with anticipating price moves? Easy! Investigate what has happened at those moving averages previously in the price trend. This can be done very quickly. All it takes is a quick visual analysis of what has happened in the past.
Author: Stephen Bigalow
Company: Candlestick Forum
Services Offered: Trading Education, Books, Videos, Webinars, Indicators, Live Trading Room
Markets Covered: Options, Stocks, Forex, Futures
Stephen W. Bigalow has nearly 40+ years of investment experience, including eight years as a stockbroker with major Wall Street firms: Kidder Peabody & Company, Cowen & Company and Oppenheimer & Company.