Guide to Day Trading Strategies

R O S S C A M E R O N
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Image of Long Body Candles (these candles can be either red or green).

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CHAPTER 5
SETTING UP YOUR CHARTS - 
TECHNICAL INDICATORS
As we setup your charts we are going to focus on keeping things simple and clean. Adding 
complexity to your charts will create unnecessary confusion. There are thousands of technical 
indicators available to download and install on your chart, but I think they are predominantly 
overrated and unnecessary. Technical indicators are almost always lagging indicators. They are 
a middleman between you and the price action. A technical indicator is a formula that calculates 
current price action and then tries to place the price in a context in order to help predict future 
price action. The problem is, that by the time a technical indicator is con
À
rming a reversal, the 
reversal is already well underway. Like with price action, a trader has to learn to anticipate the 
move before it actually happens. We can either learn to read the subtle cues of an indicator or 
focus on the candle sticks. I decided I would prefer to become an expert at reading candlestick 
shapes and patterns than the moves of a technical indicator. We are cutting out the middleman 
and going straight to the price action. The hunt for the perfect combination of indicators that 
will give you that added measure of con
À
dence can become dangerously close to the hunt for 
the Holy Grail. I would encourage you to avoid going down that path and instead, focus on 
candlestick patterns as your primary source for 
À
nding setups. In this chapter, I will introduce 
you to the technical indicators I use on a daily basis. We will discuss the detailed application of 
these indicators later in the book.

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