Combining Patterns with Indicators by William Q. Smith
ARTICLE SYNOPSIS ...Combining a technical indicator with another technical method can be the start of a viable trading system. Here's how to combine a technical indicator with a chart pattern to form one.
Pattern recognition and trend-following
can be combined to form a
useful trading system. The particular
pattern being reviewed is
the triangle chart pattern, while
the trend indicator is the 20-day
exponential moving average
(EMA). Both techniques can be
used as a basis for an entry rule for
trading opportunities. For an exit
rule, we will rely on a trailing stop
based on the parabolic indicator.
With that in ...