Stochastic-for-Swing-Trading-750x397Combining candlestick patterns with technical indicators is a sound approach. Here, we combined an oscillator and a three-bar pattern to find pullback trades.

This trading strategy is not perfect and is certainly not profitable if traded mechanically. However, it offers a solid starting point for both system and discretionary swing traders.

Both the Stochastic Oscillator and candlestick patterns are well-defined. Hence, they are easy to code into market scanning software. For swing traders finding opportunities among hundreds of stocks, this is a huge advantage.

I looked at the Stochastic Oscillator and price action to decipher the trend to avoid adding indicators. You can certainly use other methods to track the market trend. (For e.g. market structure, moving average)

Since you like candlesticks, here’s more for you: