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How Trends Work Well With Candlestick Analysis

Trends are easily spotted for the most part, and can aid in interpretation of candlestick charts.

Trend lines are perhaps the easiest of all trends to spot and to understand. These are single lines tracking a trend, and they continue until the price reverses.

Channel lines are expansions of the trend lines, consisting of a line above price and another below. It shows that the trading range may remain consistent even as price moves up or down.

Three types of trends -- short-term, reaction, and primary -- are used in Dow Theory for identifying market conditions and for timing of trades.

None of this has to be complicated. In fact, it is quite logical. When trend analysis is combined with candlestick chart analysis, you end up with a powerful tool for timing entry and exit.

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