A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits

Eastern Continuation Signals

The emphasis in Western signals is on reversal. And with few exceptions, continuation relates to the continuation occurring post-reversal, as the previous section demonstrated. With Eastern indicators (candlesticks), the distinction is more defined. Candlesticks are either reversal or continuation indicators. When continuation is located at or close to resistance or support, it has great significance.

Proximity is one of the factors adding strength to a continuation signal. So, if price breaks out above resistance or below support and, at the same time, a continuation signal appears, you seek confirmation in one or more forms. This may be found in a second candlestick indicator, a Western technical indicator, volume, ...