New Western Candlestick Entry Signals in Trendline Patterns
Traders learn about Trends Up, Down, and Sideways which are the commonly taught Trends. There is also the Long-Term Trend that is sometimes called the Primary Trend, and the Intermediate and Short-Term Trends. However few traders learn the Trendline Patterns.
All Chart Trends have Trendline Patterns. Each pattern is how price behaves over and over during a period of time, when a specific Market Participant Group controls price. These patterns can repeat for a few weeks, a few months, or over a year. All Trendline Patterns change as various Market Participant Groups cease to control price, and a new group takes over.
There can also be periods where one major Market Participant Group disrupts the Trendline Pattern briefly, which are generally called “volatility” or volatile markets.
Technical Traders and Retail Traders should learn not only the Trends of the Market, but also the 6 Primary Market Conditions. Learning to identify the different Market Trendline Patterns, reveals the Market Participant Group or Groups currently controlling price due to the huge or giant group buying or selling.
It then becomes far easier to understand why price has changed, what it means for near-term action, and how this will affect the Candlestick Patterns AND the indicators you prefer to use.
This may all sound very complicated but in truth, it is simple to learn and very easy to apply. Chart Trends have Trendline Patterns that change based on who is controlling price.
As an example, a very common Trendline Pattern that many Swing Traders enjoy using is the Stairstep Trendline Pattern. See the chart example below.
Martha Stokes CMT
TechniTrader technical analysis using a FreeStockCharts chart, courtesy of Worden Bros. and FreeStockCharts.com
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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