Why Use Compression Candlestick Pattern Indicator Analysis? - Candlestick Patterns Explained by TechniTrader®

Add Quantity Indicators to Allow for Early Entry into Stocks

All indicators have limitations and Market Conditions where the indicator fails, does not provide a true positive or negative pattern, or is simply unable to keep up with the speed of momentum price or stock volume activity. Bollinger Bands® are no exception. Bollinger Bands and the various other indicators written by John Bollinger CFA, CMT are excellent indicators; however, all indicators have times when they lag behind price.

Both chart examples in this article are the same stock. See chart example #1 below.

Adding Quantity Indicators to the analysis allowed for an early entry into this stock ahead of the High Frequency Trader (HFT) action. Chart example #2 has the stock Volume, Money Flow Index (MFI), and Accum/Dist indicators.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using StockCharts charts, courtesy of StockCharts.com

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses