Different Charting Groups

When trading using chart patterns, you should use multiple indicators to help you with your trading. Why? When multiple chart patterns and indicators point to the same direction, their signals are reinforced. If you have 4 signals indicating a bull market, and one signal indicating a bear market, naturally you should choose the direction with the most signals pointing in the same direction.

By using more than just one or two signals to confirm the trending direction, you are stacking the odds in your favour. The best traders who use charting patterns try to stay objective, remove all emotion from their trading.

There are hundreds of technical indicators to choose from. Do not choose them all. 50 would be too many. This will not help your trading results, as you can get confused from the conflicting signals. Remember to keep it Simple. Simply choose a few carefully selected indicators, and stick to them once you've developed a trading plan.

There are five different indicator types:
  • line indicators
  • moving average indicators
  • momentum indicators
  • volume indicators
  • pattern indicators
Try to choose one indicator from each family when developing your trading plan. This will help you gain an overall, and diversified view of the direction of the market.

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