Adding a trendline to an Excel candlestick chart

Another function you can enjoy when using Microsoft Excel for charting is the trendline function. It's found in the same area as moving averages see the preceding section , so if you can add a moving average, you can easily add a trendline. A trendline is a line that indicates the direction of a trend either higher or lower. The line is usually drawn based on the lows in the case of an uptrend or the highs based on a downtrend of the price action in the trend. For more information on trendlines...

Adding volume data to an Excel candlestick chart

Volume Chart Excel

The most difficult type of add-on for Excel candlestick charts is a volume chart. There are a lot of additional steps involved with this operation, and if it gets to be too taxing, you may want to leave the volume charts to the free online charting services described earlier in this chapter or the charting packages discussed at the end of the chapter. In order to create a chart with candlesticks on top and volume on the bottom (the standard presentation), download the data from Yahoo Finance in...

You can spot bears and butts quickly

Knowing a security's closing price relative to its opening price during a certain period is vital information. Candlestick charts allow you to quickly identify the days when a closing price is above an opening price and vice versa. I like to think of the daily price action as a battle between bears and bulls. Bears win when the price of a security closes lower than its open, and bulls win on the days when the close settles higher than the open. Figure 2-2 is a great example of bearish and...

The bullish squeeze alert pattern

The Bullish Squeeze Alert Pattern

The bullish squeeze alert pattern is one of my very favorite bullish patterns. It's a versatile three-stick pattern, and it pops up on a relatively frequent basis, meaning that the opportunities to trade it are more common than some of the other patterns I discuss. Spotting the bullish squeeze alert pattern The rules that govern the formation of a bullish squeeze alert allow for a little wiggle room. The strictest rule is that the first day of the pattern must be a down day. After that, the...

Using moving averages with bullishtrending candlestick patterns to confirm trends

Surfing Moving Average Pattern

If you haven't yet made your way through my discussion of technical indicators in Chapter 11 or you need a refresher, the first rule of thumb with using moving averages as trend indicators is if a security's price is above the moving average, an uptrend is in place. With that in mind, take a gander at my first example of combining moving averages with bullish-trending candlestick patterns. Charting the moving average and a bullish-trending pattern Figure 14-5 is a chart of the stock for Yum...

Picking short entry points

Candlestick Patterns With Stochastic

Picking the best entry point for a short can be a difficult undertaking, but using the stochastic indicator as a supplement to your candlestick patterns can make the task much easier. For a prime example of how the stochastic indicator can be used with a bearish candlestick pattern to pick a short entry, take a look at Figure 13-5. In the figure, you see a chart of Convergys Corporation (CVG), a provider of specialized software solutions for business customers. Its headquarters is in...

Realizing the advantages of candlestick charting

You'd be hard pressed to find someone who's more enthusiastic about candlestick charting than yours truly. I can go on and on about the advantages that candlesticks afford. If you want to read more of my gushing about the many great advantages of candlestick charting, turn to Chapter 2, but here are my top reasons il One of the best features of candlestick charting in general is the visual appeal and readability. You can glance at a candlestick chart and quickly gain an understanding of what's...

Short trades and trend confirmation with trendlines and bearish patterns

Candlestick Confirmation Entry

Selecting the most appropriate time to get into a short trade can be a trying task. Timing is critical, and any decision-making help can be a real blessing. Luckily for you, considering trendlines and bearish-trending candlestick patterns together can provide just that type of help. I show you what I mean in this section with a couple of real-world examples. A short trade example with a bearish trendline and candlestick pattern You can find the first example in Figure 15-1, which features a...

Using the RSI to help pick short entry and exit points

Entry And Exit Candlestick Patterns

You can combine the RSI with your candlestick patterns to pick wise entry points for a short trade. But that's not the whole story. You can also use that same combination of trading tools to indicate when you should exit a short. Figure 13-3 presents a situation in which a combination of the RSI and a bearish candlestick pattern can show you when to get in and out of a short position. The chart is for Peabody Energy (BTU), a mining company that focuses on coal production. Peabody Energy's...

Buying with the Stochastic Indicator and a Buttish Reversal Candlestick Pattern

Stochastic Patterns Trading

The stochastic indicator is another very useful indicator for detecting overbought or oversold security conditions. It has two components the slow and the fast stochastic. When the fast is under the slow, there's a downtrend in place, and when the fast is higher than the slow, there's an uptrend. The slow and fast stochastic indicators oscillate between 0 and 100 and have fairly complex look back periods, much like the RSI. (See Buying with the RSI and Bullish Reversal Candlestick Patterns...

Using Technical Indicators Alongside Bullish Trending Candlestick Patterns

Combining trendlines with bullish-trending candlestick patterns Making profitable trades with moving averages and bullish-trending candlestick patterns ou can combine candlestick patterns effectively with a variety of technical indicators to produce information that helps you decide when to put on and get out of trades. Like candlestick patterns, many technical indicators tell you when a trend is about to reverse, but several others can let you know that a prevailing trend continues. These...

Generating candlestick charts on CNBCcom

Here's how to take advantage of CNBC.com's free candlestick charting offerings 1. Direct your Internet browser to www.cnbc.com. Near the top of the page, you'll see a box for entering a symbol, with the links Quote and Chart directly above it. 2. Click Chart, enter your symbol, and click the Go button to the right of the box. You should see a line chart for the stock you entered. 3. On the Chart Style drop-down menu, select Candle. The chart is refreshed, and a candlestick chart appears in...

Working with Simple Candlestick Patterns

Part II features descriptions and explanations of some of the most basic and common candlestick patterns. The simplest candlestick patterns involve just one day or one period of price data, and you can find information on those patterns in Chapters 5 and 6. Two-stick candlestick patterns are one step up from those basic patterns, but just a single step up in complexity can provide quite a bit of additional information and versatility. Some extremely helpful two-stick candlestick patterns pop up...

Understanding Candlestick Components

You can't trade and invest effectively by using candlestick charts unless you understand candlestick patterns, and you may have a very hard time understanding those patterns if you aren't familiar with basic candlestick construction. Candlestick charting starts with the knowledge of what it takes to make a candlestick and how changes in that basic information impact a candlestick's appearance and what it means. For starters, you need to know what goes into creating a candlestick's wick (the...