Candlestick Patterns and Pivots

Candlestick Patterns and Pivots

Candlestick Patterns and Pivots

Candlestick pattern trading techniques are used by astute traders and investors in every type of market.  They represent tools that allow individuals to recognize opportunities presented more efficiently than a simple examination of the data as represented by a historical bar chart.

The most professional and successful investors recognize that candlesticks offer more graphic presentations to allow for a rapid response to market developments.

Candlestick Patterns and Pivots – The value of pivot points

The use of candlestick trading techniques in conjunction with other technical analysis indicators, such as pivot points, only helps to improve investing results. Pivot points are judiciously used by traders in order to identify strategic support the resistance levels. Pivot points represent important support and resistance trading areas, where the likelihood of a reversal in price movement is greatest, offering the opportunity for an investor to take on a position with a high probability of success.

Pivot points have traditionally been used both when trading a range, or looking for a breakout. When used for range trading, pivot points identify levels where reversals will occur.  Breakout traders, on the other hand, recognize these key levels as the point where trading activity needs to penetrate in order to signal a true breakout has occurred.

Candlestick Patterns and Pivots – Using pivot points to calculate entries and exits

Upon the identification of the primary, secondary, and tertiary support and resistance levels through pivot point calculations, one has determined the various support and resistance levels for which an investor should consider trade entry or exit.

Only upon prices reaching a certain pivot point level should the individual trader determine the proper position to undertake, regardless if it is long or short.  Overall, trading below a pivot point level is considered a bearish indicator, while trading above is considered bullish.

Candlestick Patterns and Pivots – Including pivot points with your candlestick analysis

Both Candlestick Patterns and Pivots, in and of themselves, have been used successfully by investors for a very long time.  When used in conjunction, they complement each other and offer the astute trader far improved results. Developing a trading plan based upon candlesticks alone is a difficult process and offers the possibility of unsuccessful investments. As such, the more successful traders use candlestick pattern formations in conjunction with other techniques, such as pivot points, in order to make trading decisions.

When certain candlestick formations have occurred and their indication can be confirmed by a subsequent pivot point analysis, (Candlestick Patterns and Pivots) the probability of a successful trade greatly increases. How an individual decides to use these two techniques in a strategy plan you develop will be greatly dependent upon the type of trading you envision undertaking, especially in the context of short-term versus long-term positions.Success in any endeavor is highly contingent upon the proper preparation of the participant.  Through careful research and study of historical data, you can clearly ascertain that candlestick patterns and pivot point analysis can successfully produce profitable trading opportunities.

When it comes to Candlestick Patterns and Pivots look to patterns like a morning star doji passing thru a daily or weekly pivot for a very high odds l;ow risk trade.  Look for overextended bullish price action and a nice doji at pivot resistance far a nice entry short and a potential large move down your ability to combine the right Candlestick Patterns and Pivots together at the right time on the chart is very powerful.  Looking to build a good trading strategy start with Candlestick Patterns and Pivots and you will not be wasting your time I promise.

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