Candlestick Charting For Dummies®

Charts Can Give False Signals

I am the first to admit that sometimes — in some cases up to 50 percent of the time — signals can be wrong. If all signals were reliable, then you could just see A and do B time after time, and you (and all your trading peers) would rake in the profits.

But the reality is that charts do give false signals, and it’s up to you to use proper money management to limit the losses that can occur when good signals go bad. Always use wise stops when you put on a trade, and remember that when a signal fails, you must get out and move on.