Candlestick charts are the oldest form of charting but their use in western markets is relatively new so many traders need to learn how to use this wonderful technical analysis tool.
Profitable trading depends upon the use of multiple indicators. Understanding leading indicators will allow you to trade stocks with greater success than just following prevailing trader action in the market.
MACD is a trend following indicator developed by Gerald Appel in the 70's during a very different market than we have today. The theory of the Moving Average Converging /Diverging is that when two moving averages cross, a significant change of trend in stocks is more likely to occur.
Stochastic is a price oscillator tracking overbought and oversold conditions. It is often used in the red light/green light trading systems which can cause problems for traders unless they understand how stochastic works.
For all trading styles, the chart should have sufficient height to provide a ratio of time to price action. The ideal is 2.5" in length to 1" in height. This ratio gives the best view of price over time and avoids the distortion of price often found on charts.
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