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Profiting from Technical Analysis and Candlestick Indicators: Powerful Methods for Accurately Timing Trades by Michael C. Thomsett

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5. Continuation Signals—The Mid-Trend Signs

The focus of most traders on reversal signals is understandable. The point of reversal is where a majority of trades will occur. Continuation only forecasts that no action should be taken. However, some attributes of continuation should be remembered, including:

Image A reversal signal does not act as continuation. Some arguments about indicators, especially candlesticks, include the point that when a reversal signal appears in the wrong place, it acts as a continuation signal. For example, a bearish signal appearing during a bear trend fits this category. However, it is not as simple as relabeling a reversal ...

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