I was Right On Gold/XAUUSD,Watch This Video To See How I did itIn this video, I gave the full breakdown of how I could see and accurately predict Gold's bullish move before it happened.
If you enjoy my content, drop a comment, boost this video, and make sure you follow me so you won't miss my future updates.
Candlestick Analysis
Analysis of the psychology and Price Action of a momentum moveIn this video I take a look at the psychology of a phase of Price Action that we traded in out Live Trading Room.
I review the key price action that I am looking for to get involved in the action for a new momentum push up/down. Our aim in trading is always to enter a trade in the 'unknown' as traders start to realise they are on the wrong side of the action...this gives us the biggest payouts.
Intraday Trading is a process of doing the analysis, reviews and having confidence in your read when LIVE trading.
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How to Read CANDLESTICK Chart For Beginners
Hey traders,
If you follow me for quite a while you probably noticed that I apply a candlestick chart for the market analysis.
In this post, we will discuss how to read an individual candlestick and we will outline its important elements.
🔰The candlestick reflects the price movement for a selected period of time.
An hourly candle will show you a price action within an hour and a daily candle within a day.
Above, you can see 2 charts. On the left - daily time frame. On the right - 4h time frame. One single daily candle composes the entire price action within 24 hours, while a 4H candle - the price action within 4 hours.
🔰The candlestick pattern has a very specific shape:
it is composed of a body and a wick.
The wick of the candle indicates the range of the price action within the candle. Its upper wick will show you the highest price during that time period and its lower wick will show the lowest price, while the body of the candle indicates its opening and closing price.
🔰From the color of the body of the candle, we identify its direction.
Green signifies a bullish candle while red signifies a bearish one.
A green candle signifies that the price grows, while a red candles signifies a downward movement.
🔰The lower boundary of a body of a bullish candle will show its opening price and its upper boundary its closing price.
🔰The upper boundary of a body of a bearish candle indicates its opening price and its lower boundary its closing price level.
With so many elements within a single candlestick, one can derive a lot of valuable information.
Some candlesticks have a very specific form and are called candlestick patterns. They are applied for predicted the future market behavior.
A proper reading of a candlestick chart may unveil a lot of insights about the market, so it is very important for you to learn to work with that.
Let me know, traders, what do you want to learn in the next educational post?
Hammer of Trend ChangeThe Hammer and Inverted Hammer candlestick patterns, two powerful tools adept traders employ for reversals.
If you appreciate our charts, give us a quick 💜💜
Here’s what you need to know:
1. Understanding the Essence:
Hammer: This pattern typically emerges at the culmination of a downtrend, indicating a potential bullish surge. Its small body and extended lower wick signify the bears' struggle to maintain lower prices.
Inverted Hammer: Contrarily, this pattern usually appears at the end of an uptrend, foreshadowing a possible bearish move down. Its small body and prolonged upper shadow denote the weakening grip of the bulls.
2. Decoding the Signals:
While Hammers don’t provide direct trading signals, they suggest a shift in momentum. Traders often see them as a sign of potential upward movement after a downtrend.
Inverted Hammers, appearing after an uptrend, hint at a potential reversal. The failed attempt by the bulls to sustain higher prices signifies a looming bearish sentiment.
3. Crafting Your Strategy:
When dealing with Hammers, traders might enter immediately after its formation or wait for confirmation with a bullish candle. Setting a stop-loss just below the recent low and targeting a significant resistance level is a common strategy.
For Inverted Hammers, a similar approach can be employed, focusing on prior support-turned-resistance levels. Vigilance and additional technical analysis are crucial for accurate predictions.
4. A Word of Caution:
While these patterns are robust, they should never be sole trading indicators. Combining them with other technical tools enhances accuracy and confidence in your trades.
5. Practice and Precision:
Prior to real trades, practice these strategies on demo accounts or paper trading. Platforms like TradingView, Vestinda and others like MetaTrader offer a conducive environment for refining your skills.
Incorporating Hammer and Inverted Hammer patterns into your trading toolkit empowers you to detect potential trend shifts. Remember, in trading, nuanced insights can translate into significant profits. Happy trading!
Candlestick Patterns Unveiled: Your Guide to 6 Key Signals🕯📈📉
Candlestick patterns are a trader's secret language, revealing potential market movements and trends. Among the multitude of candlestick formations, six key patterns stand out for their significance in technical analysis. In this comprehensive guide, we'll explore these patterns, providing real-world examples to help you decipher their bullish and bearish implications. With this knowledge, you'll be better equipped to make informed trading decisions in the dynamic world of finance.
Exploring 6 Key Candlestick Patterns
Candlestick Pattern 1: Bullish Engulfing 🐂🕯
The Bullish Engulfing pattern is a potent bullish signal that appears after a downtrend. It involves a small bearish candle followed by a larger bullish candle that completely engulfs the previous one.
Candlestick Pattern 2: Bearish Engulfing 🐻🕯
The Bearish Engulfing pattern is its bearish counterpart, signaling a potential reversal at the end of an uptrend. It consists of a small bullish candle followed by a larger bearish candle that engulfs the previous one.
Candlestick Pattern 3: Bull Flag 🐂🚩
The Bull Flag is a continuation pattern that often appears in uptrends. It consists of a sharp upward price movement (flagpole) followed by a period of consolidation (flag).
Candlestick Pattern 4: Bear Flag 🐻🚩
The Bear Flag is the bearish counterpart of the Bull Flag. It appears in downtrends and consists of a sharp downward price movement (flagpole) followed by consolidation (flag).
Candlestick Pattern 5: Morning Star 🌄🕯
The Morning Star is a bullish reversal pattern that appears after a downtrend. It comprises three candles: a large bearish candle, a small indecisive candle (often a Doji), and a large bullish candle.
Candlestick Pattern 6: Evening Star 🌇🕯
The Evening Star is the bearish counterpart of the Morning Star and signals a potential reversal at the end of an uptrend. It also consists of three candles: a large bullish candle, a small indecisive candle, and a large bearish candle.
These six key candlestick patterns are essential tools in a trader's arsenal, providing insights into potential reversals and continuations. However, remember that successful trading requires considering other factors like trend analysis, volume, and market context. By mastering these patterns and applying them judiciously, you can enhance your trading skills and make more informed decisions in the dynamic world of finance. 🕯📈📉
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Daytrade Review on the Hang Seng IndexI small trade today on the Hang Seng Index that turned out to be quick and simple with little to no pressure from the entry. Could have been a better exit but all up it was a good start to the day.
I will explain the price action for the Entry and the reasoning for the trade coming into the start of the session.
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The primary trend on the 1-hour time frame is still bearish.The 1-hour chart has not yet closed a candlestick pattern indicating a bottom. We should continue monitoring the chart and look for signs of a bottoming pattern. Once a bottoming pattern forms on the 1-hour chart, we can then consider looking for a counter-trend trading signal.
What is Tweezer Top and Bottom Patterns?Welcome to the world of trading patterns. If you appreciate our charts, give us a quick 💜💜
Today let's explore Tweezer top and bottom patterns, often referred to as simply "tweezers," are powerful candlestick formations that hold the potential to unveil significant shifts in market sentiment.
These patterns materialize as twin candles appearing at the culmination of a trend, indicating the impending transition of market dynamics. In this exploration, we'll delve into the intricacies of these patterns, unveiling their secrets for traders seeking to navigate the ever-evolving landscape of financial markets.
Tweezer Top:
A tweezer top pattern occurs during an uptrend when the price reaches a high point and then experiences a sudden reversal. It is characterized by two consecutive candlesticks with almost identical highs. The pattern suggests that the bulls are losing their grip, and a potential trend reversal or a bearish correction might follow.
Traders often interpret the tweezer top as a signal to consider selling or shorting an asset, especially if it appears after a prolonged uptrend. However, it's essential to confirm this pattern with other technical indicators or chart patterns to increase its reliability.
Tweezer Bottom:
Conversely, a tweezer bottom pattern emerges in a downtrend when the price reaches a low point and then reverses its direction. Similar to the tweezer top, tweezer bottoms consist of two consecutive candlesticks with nearly identical lows. This pattern signifies a potential end to the bearish trend, indicating that the bulls might take control soon.
Traders view the tweezer bottom as a signal to consider buying or going long on an asset, particularly if it appears after an extended downtrend. As with any trading pattern, it's crucial to validate the tweezer bottom with other technical tools to confirm the potential trend reversal.
Key Considerations:
Confirmation is Key: Tweezer patterns, while useful, should always be confirmed by other technical indicators or chart patterns before making trading decisions.
Volume Analysis: Analyzing trading volumes during the formation of tweezer patterns can provide additional confirmation of the potential trend reversal.
Market Context: Consider the overall market context and fundamental factors influencing the asset to make well-informed trading decisions.
Ultimate Guide For Trading INVERTED HEAD & SHOULDERS PATTERN
Hey traders,
Inverted head and shoulders pattern is a classic reversal pattern.
It signifies the weakness of buyers in a bearish trend and a bullish accumulation.
⭐️The pattern has a very peculiar price action structure:
Trading in a bearish trend the price sets a lower low and retraces setting a lower high (left shoulder),
then the market goes lower setting a new low but instead of setting a new lower high, the price returns back to the level of a previous lower high setting an equal high (head).
After that bears start pushing again but with an amplifying bullish pressure, the market sets a higher low and returns back to equal highs setting a new one (right shoulder).
🔔Equal highs form a horizontal structure called a neckline.
Here is a perfect example of a completed inverted head and shoulders patterns, that was formed in a bearish trend on Gold on a 4H time frame.
Once the pattern is formed it is still not a trend reversal predictor though.
The trigger that is applied to confirm a trend reversal is a bullish breakout of a neckline of the pattern.
Above, the breakout of the neckline is the indication of a confirmed bullish reversal.
📈Then a long position can be opened.
For conservative trading, a retest entry is suggested.
Safest stop is lying at least below the right shoulder.
However, in case the heights of the right shoulder and head are almost equal it is highly recommendable to set a stop loss below the head level.
🎯For targets look for the closest strong structure resistances.
After a retest of a broken neckline, Gold bounced. Entry was lying on a neckline, stop loss below the right shoulder, target was based on a closes strong resistance.
Hey traders, let me know what subject do you want to dive in in the next post?
Indicator idea " USX "USX is the average of NAS100 , SPX500 and US30 (all from BLACKBULL data provider).
( average of the 3 Open = O ),
( average of the 3 High = H),
( average of the 3 Low = L),
( average of the 3 Close = C),
Plotted as candles using thoses OHLC, making a chart representing the average price action of indexes.
It is preferable to use on 15m TF (read the ORB part below).
Usage and inputs :
- An important part is the ORB box (Opening Range Breakout) sometime reffered as OPR (Opening Price Range).
This plot a box based on market opening candle (NY time, 15m) high & low.
This box will be colored green if close is above the half value of the box and red if below.
A basic strategy for Stocks and Indexes traders is to wait after open that the price break that 9h30 to 9h45 range an enter accordingly for a scalp in the dominant direction.
( Doesn't work everytime, even less for crypto, but i've been using this tool on each separate index for some time and let me tell you, at NY open the world is always somehow correlated to what happen in Wall Street. )
- Additionnal sma21,55,89 and AMA (the average of the 3 sma).
Optionnal trend confirmation based on the position of close relative to the 3 sma (simultanously above or below) and colored background assiociated.
- The possibility to use VERY lengthy (tweakable) RSI rather than standard average $ values but it's not very effective as the candles look awful (on any big timeframes)...
- In the input you can adjust the % of each of the 3 index in the total from 0% to 100%, so you can, for exemple put NASDAQ % IN INDEX more important than S&P % and DOWJONES even lower (as Crypto-currencies are generally more related to Tech sector).
That's it for now,
Don't hesitate to ask question, even if I've already said too much...
PS: That only an idea, yes the indicator is created and functionnal. Maybe i'll publish it, probably free + open source as i anyway explained everything ;)
Peace, may the profit be with you all
The Power of Candlestick Encapsulation in Trading: Utilizing theTrading is a captivating and intricate field that demands a profound understanding of financial markets, investment strategies, and technical analysis. Among the many techniques employed by traders, candlestick encapsulation is one that can prove to be particularly powerful. In this article, we will explore the concept of candlestick encapsulation and how one can harness the 50% of the first candle's length as a potential support or resistance level.
What Is Candlestick Encapsulation?
Candlestick encapsulation, also known as an "inside bar," is a price pattern that occurs when a subsequent candle develops within the boundaries of the preceding candle. In other words, the price range of the second candle is entirely contained within the range of the first candle. This pattern can appear on any time frame, from daily candles to one-minute candles, and is often used by traders to identify potential turning points in the markets.
How to Identify Candlestick Encapsulation?
To identify candlestick encapsulation, follow these steps:
* Examine the First Candle: Begin by observing the most recent candle on your price chart. This will be the "mother candle."
* Take a Look at the Next Candle: Next, examine the candle that follows the mother candle. This candle should have a price range that is completely contained within the range of the mother candle.
* Confirm the Pattern: To confirm candlestick encapsulation, the second candle must close within the range of the mother candle.
Using the 50% Level as Support or Resistance
Now that we understand what candlestick encapsulation is, let's explore how to leverage the 50% of the first candle's length as a potential support or resistance level.
* Calculate the Length of the First Candle: Measure the length of the mother candle from its high to its low.
* Calculate 50% of the Length: Now, calculate exactly 50% of this length. You can do this by adding the high and low of the mother candle and dividing by two.
* Draw the Horizontal Line: Plot a horizontal line on your price chart at the level you calculated as 50% of the mother candle's length.
* Observe Price Behavior: This horizontal line represents a potential support level if prices move below it or a resistance level if prices stay above it. Observe how prices react when they reach this level.
Interpretation and Strategy
The use of the 50% level of the mother candle's length as support or resistance can be applied in various trading strategies. Here are some important considerations:
* Breakout Strategy: If prices break above the 50% level, there may be a potential bullish breakout. In this case, traders may look for buying opportunities.
* Pullback Strategy: If prices return to the 50% level after a breakout, this could be an opportunity to enter positions in the direction of the prevailing trend.
* Stop Loss and Take Profit: Traders can use the 50% level as a reference point to place stop-loss or take-profit orders.
Conclusion
Candlestick encapsulation is a technical analysis technique that can provide valuable insights into potential turning points in financial markets. By using the 50% level of the mother candle's length as support or resistance, traders can add another tool to their trading toolkit for making informed trading decisions. However, it is important to remember that no technique is foolproof, and trading always involves a degree of risk. Therefore, it is advisable to combine this technique with careful risk management and a solid understanding of financial markets.
EUR/GBP: how to identify a liquidity sweep (+ a technical bonus)This idea will be both educational and technical.
First, we start with the educational part.
If someone were to ask me what a liquidity grab (Stop Loss hunt) really is, I would show them this specific chart illustration. If we take a deep look at the Daily-timeframe graph, we might observe how the price has been able to tap above/below wick rejections and top/bottom reversal formations before aggressively impulsing in pre-determined destinations. This happens for the sole reason of taking out early entrants, who tend to place their Stop Loss orders a few pips above/below identified reversal patterns, before riding the wave in the pre-orchesrated direction.
Marked by a red line, we have mapped some of the recent initial reversal legs, all of which are followed by liquidity taps above/below the formed wick candles and a major reversal levels. It can be inferred how the price tends to make manoeuvres and trick masses into believing that impulses have already commenced, which forces traders into making irrationally rushed decisions and opening transactions with their SL orders set a few ticks above the recent wick. The rest is known: the price prints a leg to the upside/downside, taps into the liquidity pool, then carries on acting as planned and destined.
From the technical standpoint, the price has tapped into the Weekly timeframe lows and is on the verge of leaving a potential wick candle and impulsing towards the south in the direction of the recent Lows as painted on our graphic. Combining that with the Daily-timeframe identification of a probable liquidity sweep, we are confident about going short and targeting the zone we have identified on the chart.
For further reference, I am attaching a recent educational post of ours on the same theme published last month (“Avoid getting trapped and hunted by market sharks”).
Using Candle Wicks to refine your daytrading entriesIn the video I discuss the importance of 'Candle Wicks' in price action and how I use them to refine an entry.
I like to use the 1 minute chart for my entries and have certain criteria to trade with the trend (which I discuss in the video). When trying to trade with the predominant trend up/down, I look to trade retracements. One thing I look for is wicks into the EMAs and then a reversal of the previous candle.
I find these greatly help my timing for entries and can greatly reduce my risk.
I hope that you enjoy the video and are able to use in your own trading.
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Mastering the Pin Bar Candlestick Pattern in Forex 🕵️♂️📈✨
In the world of forex and gold trading, chart patterns often hold the key to unlocking profit potential. Among these patterns, the pin bar stands out for its reliability and versatility. In this comprehensive guide, we'll delve into how to effectively apply the pin bar candlestick pattern to enhance your trading strategies. Through real-world examples, you'll gain the skills and knowledge to spot and leverage this powerful pattern in your trading endeavors.
Understanding the Pin Bar Candlestick Pattern
A pin bar, or "Pinocchio bar," is a single candlestick pattern that indicates potential price reversals or continuations. It consists of a small body with a long wick or "nose" that extends beyond the body. The direction of the nose (up or down) is a crucial signal:
- Bullish Pin Bar: The nose points downward and appears at the bottom of a downtrend, suggesting a potential bullish reversal.
Example 1: Bullish Pin Bar in Gold Trading
- Bearish Pin Bar: The nose points upward and forms at the top of an uptrend, indicating a possible bearish reversal.
Example 2: Bearish Pin Bar in Forex
Applying the Pin Bar in Your Trading Strategy
1. Confirmation: Don't rely solely on the pin bar; use it in conjunction with other technical analysis tools like support and resistance levels, trendlines, and indicators to confirm your trade.
2. Risk Management: Set stop-loss orders below the low (for bearish pin bars) or above the high (for bullish pin bars) of the pin bar to limit potential losses.
3. Entry and Exit: Determine your entry and exit points based on the pin bar's implications. For instance, you might enter a trade on the open of the next candle after a pin bar and exit when a predetermined profit target is reached.
The pin bar candlestick pattern is a valuable tool in forex and gold trading, offering insights into potential reversals or continuations. By understanding its structure and applying it in conjunction with other technical analysis tools, you can make more informed trading decisions. Remember, practice and careful analysis are key to successfully integrating the pin bar into your trading strategy. Now, armed with this knowledge, you're ready to uncover profit potential in the markets! 🕵️♂️📈✨
Dear followers, let me know, what topic interests you for new educational posts?
The Keys to Success Every Forex Trader Should Master 🕵️♂️📊💡
In the fast-paced world of forex trading, understanding price action is akin to possessing a treasure map. Price action analysis is the art of deciphering market movements based on price movements alone, without relying on indicators or oscillators. In this comprehensive article, we'll reveal the essential price action secrets that every forex trader should know. We'll explore real-world examples and equip you with the knowledge needed to navigate this thrilling terrain.
The Secrets of Price Action
1. Candlestick Patterns: Candlestick patterns are powerful tools in price action analysis. They reveal market sentiment and potential trend reversals.
2. Support and Resistance: Identifying key support and resistance levels on a price chart can provide insights into potential price reversals or breakouts.
3. Trendlines: Drawing trendlines allows traders to visualize price trends and anticipate potential entry and exit points.
Real-World Examples
Example 1: EUR/USD - Bullish Reversal:
Example 2: GBP/JPY - Breakout:
Unlocking the secrets of price action analysis is the key to success for every forex trader. By mastering candlestick patterns, understanding support and resistance levels, and utilizing trendlines, you can decipher market movements and make informed trading decisions. Armed with these price action secrets, you're better equipped to navigate the ever-changing landscape of forex trading and seize profitable opportunities. 🕵️♂️📊💡
Dear followers, let me know, what topic interests you for new educational posts?
Mastering the Cup and Handle Pattern in Forex and Gold Trading
In the world of forex and gold trading, recognizing chart patterns can be your key to unlocking profitable opportunities. One such pattern, the Cup and Handle, offers traders a powerful tool for identifying potential bullish trends. In this comprehensive article, we'll explore how to identify and trade the Cup and Handle pattern in both forex and gold markets. We'll provide real-world examples to help you navigate these exciting trading opportunities.
Understanding the Cup and Handle Pattern
The Cup and Handle is a bullish continuation pattern that resembles the shape of a teacup. It consists of two main parts:
1. Cup: The first part forms a rounded bottom, resembling a cup. It typically follows a downtrend and represents a period of consolidation.
2. Handle: The second part is a smaller consolidation or retracement, forming a downward-sloping channel or flag pattern. It resembles the handle of a cup.
Identifying the Cup and Handle Pattern
To identify and trade the Cup and Handle pattern, follow these key steps:
1. Downtrend: Look for a significant downtrend that precedes the formation of the Cup and Handle pattern.
2. Cup Formation : The cup should be a rounded bottom, indicating a period of consolidation or accumulation. The depth of the cup can vary, but it should generally resemble a "U" shape.
3. Handle Formation: After the cup, there should be a smaller consolidation or retracement forming a downward-sloping channel or flag pattern. This is the handle of the cup.
4. Volume Analysis: Analyze volume trends. Typically, there is a decrease in volume during the handle formation, signaling a temporary pause in the trend.
1. Forex - EUR/USD:
2. Gold - XAU/USD:
Trading Strategies
1. Entry Point: Enter a trade when the price breaks out above the handle's upper boundary. This breakout confirms the bullish sentiment.
2. Stop-Loss: Place a stop-loss order below the handle's lower boundary to manage risk.
3. Take Profit: Estimate the potential price target by measuring the distance from the cup's bottom to the handle's breakout point and then adding it to the breakout level.
The Cup and Handle pattern is a valuable tool for identifying potential bullish trends in both forex and gold markets. By understanding its components and following a structured trading approach, you can leverage this pattern to make informed trading decisions and potentially unlock profitable opportunities in your trading journey. 🏆📈💰
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Unraveling the Traits of Pivotal Bullish and Bearish Candles 🕯
In the intricate world of forex trading, understanding the nuances of candlestick patterns is akin to deciphering a secret code. Candlesticks are more than just price representations; they embody the ebb and flow of market sentiment. In this comprehensive article, we will delve into the characteristics of crucial bullish and bearish candles, unveiling the stories they tell through real-world examples. By mastering these candlestick traits, you'll enhance your ability to spot trading opportunities and make informed decisions in the forex market.
Unveiling Bullish Candle Characteristics
1. Long White Candle:
A long white candle is a robust bullish signal. It signifies a substantial price increase during the candle's timeframe. The candle typically opens near its low and closes near its high, reflecting strong buying pressure.
2.Bullish Engulfing Candle:
A bullish engulfing candle occurs when a smaller bearish candle is followed by a larger bullish candle that engulfs it entirely. This pattern suggests a shift from bearish sentiment to bullish sentiment.
Unmasking Bearish Candle Characteristics
1. Long Black Candle:
A long black candle is a prominent bearish signal, reflecting substantial selling pressure. It opens near its high and closes near its low, showcasing a significant price decline during its timeframe.
2. Bearish Engulfing Candle:
A bearish engulfing candle forms when a smaller bullish candle is followed by a larger bearish candle that engulfs it entirely. This pattern suggests a shift from bullish to bearish sentiment.
Trading Implications
1. Confirmation of Trends: Bullish and bearish candles often confirm existing trends. Traders can use them to enter or add to positions in the direction of the trend.
2. Reversal Signals: These candles can also signal potential trend reversals when they appear at key support or resistance levels. Traders look for follow-up candles to confirm reversal patterns.
3. Volatility Assessment: The size and characteristics of these candles provide insights into market volatility, aiding traders in adjusting their risk management strategies.
Candlestick analysis is an art that can help traders uncover market sentiment and identify potential trading opportunities. By understanding the characteristics of important bullish and bearish candles, you can gain deeper insights into price movements and enhance your ability to make informed decisions in the dynamic world of forex trading. 📊🕯📈
Dear followers, let me know, what topic interests you for new educational posts?
Unveiling the Battle Between Buyers and Sellers🕯📈🤝
Introduction
Candlestick charts are a cornerstone of forex trading, offering valuable insights into market dynamics. One key element of a candlestick is the size of its body, which provides crucial information about the strength of buyers and sellers. In this comprehensive article, we'll explore how the size of a candle's body reflects market sentiment, provide real-world examples, and equip you with the knowledge to make informed trading decisions.
Understanding Candlestick Bodies
The body of a candlestick represents the difference between the opening and closing prices within a specific time frame. Its size and color convey essential information about the battle between buyers (bulls) and sellers (bears).
Interpreting Candlestick Body Size
1. Large Bullish Candle Body:
A candle with a large bullish body indicates strong buying pressure. In such cases, the closing price is significantly higher than the opening price, suggesting that buyers have dominated the market during the given time frame.
2. Large Bearish Candle Body:
Conversely, a candle with a substantial bearish body signifies strong selling pressure. The closing price is well below the opening price, indicating that sellers have dominated.
3. Small or Doji Candle Body:
A small or doji candle body suggests indecision or a balance between buyers and sellers. The opening and closing prices are close, and the body may appear as a thin line or a small box.
Relevance and Trading Strategies
1. Trend Confirmation: Large bullish or bearish candle bodies can confirm the strength of an existing trend. Traders may use such candles to enter or add to positions in the direction of the trend.
2. Reversal Signals : Small or doji candle bodies near support or resistance levels can signal potential trend reversals. Traders watch for follow-up candles to confirm reversal patterns.
3. Volatility Assessment: Candle body size can also provide insights into market volatility. Larger bodies often accompany higher volatility, while smaller bodies indicate calmer market conditions.
Conclusion
Mastering the interpretation of candlestick bodies is a valuable skill in forex trading. It enables traders to gauge the strength of buyers and sellers, confirm trends, identify potential reversals, and assess market volatility. By incorporating this knowledge into your trading strategy, you can make more informed decisions and enhance your ability to navigate the ever-changing forex market. 📊🕯📈
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Love you, my dear followers!👩💻🌸
Your ULTIMATE Guide For Time Frames in Trading
If you just started trading, you are probably wondering what time frames to trade. In the today's post, I will reveal the difference between mainstream time frames like daily, 4h, 1h, 15m.
Firstly, you should know that the selection of a time frame primarily depends on your goals in trading.
If you are interested in swing trading strategies, of course, you should concentrate on higher time frames analysis while for scalping the main focus should be on lower time frames.
Daily time frame shows a bigger picture.
It can be applied for the analysis of a price action for the last weeks, months, and even years.
It reveals the historical key levels that can be relevant for swing traders, day traders and scalpers.
The patterns that are formed on a daily time frame may predict long-term movements.
In the picture above, you can see how the daily time frame can show the price action for the last years, months and weeks.
In contrast, hourly time frame reflects intraweek & intraday perspectives.
The patterns and key levels that are spotted there, will be important for day traders and scalpers.
The setups that are spotted on an hourly time frame, will be useful for predicting the intraday moves and occasionally the moves within a trading week.
Take a look at the 2 charts above, the hourly time frame perfectly shows the market moves within a week and within a single day.
4H time frame is somewhere in between. For both swing trader and day trader, it may provide some useful confirmations.
4H t.f shows intraweek and week to week perspectives.
Above, you can see how nicely 4H time frame shows the price action on EURUSD within a week and for the last several weeks.
15 minutes time frame is a scalping time frame.
The setups and levels that are spotted there can be used to predict the market moves within hours or within a trading session.
Check the charts above: 15 minutes time frame shows both the price action within a London session and the price action for the last couple of hours.
It is also critical to mention, that lower is the time frame, lower is the accuracy of the patterns and lower is the strength of key levels that are identified there. It makes higher time frame analysis more simple and reliable.
The thing is that higher is the time frame, more important it is for the market participants.
While lower time frames can help to predict short term moves, higher time frames are aimed for predicting long-term trends.
Day Trading the Hang Seng IndexDay trading the Hang Seng Index...explanation of the two trades for the day and the price action that led to the setups.
I talk through my approach to Day trading and how I use the indicators along with how to Manage the Risk while in a trade.
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Candlestick Strength Unveiled: Accurate Assessment Techniques 🕯
In the realm of financial markets, candlestick patterns serve as invaluable tools for traders seeking insights into price movements. Yet, not all candlesticks are created equal. Understanding how to measure the strength of a candlestick is paramount to distinguishing between reliable signals and false alarms. This article unveils techniques for accurately gauging the strength of candlesticks, ensuring you make informed trading decisions.
Decoding Candlestick Strength
Candlestick strength is a reflection of the conviction behind price moves, highlighting whether the momentum is robust or fragile. Several factors contribute to assessing this strength:
1.Body Size: The size of the candlestick body relative to previous candles provides insight into market sentiment. A larger body signifies stronger conviction, indicating potential trend continuation or reversal.
2.Candlestick Shadows (Wicks/Tails): The length of shadows compared to the body reveals the battle between bulls and bears. Longer shadows imply higher volatility and uncertainty, potentially weakening the candle's significance.
3.Volume: Trading volume accompanying a candlestick provides clues about market participation. Higher volume validates stronger moves, while low volume suggests caution.
Examples
Strong Bullish Candlestick:
Weak Bearish Candlestick:
Doji Candlestick:
Techniques to Evaluate Strength
1.Comparative Analysis: Compare the current candlestick with previous ones to assess its size, shadows, and volume in relation to the broader trend.
2.Support and Resistance: Analyze the candlestick's position concerning key support and resistance levels. A strong candlestick breaking through a significant level enhances its strength.
3.Confirmation Signals: Look for additional indicators like moving averages or trendlines supporting the candlestick's strength, boosting your confidence in its signal.
Mastering the art of measuring candlestick strength empowers traders to decipher the market's underlying dynamics with precision. By incorporating body size, shadows, volume, and supplementary factors into your analysis, you'll be equipped to separate potent signals from noise, enhancing your trading strategy.
With these techniques, you'll be navigating the markets armed with a deep understanding of candlestick strength – a vital skill for successful trading. 📈🔍💪
What do you want to learn in the next post?
Japanese Candlesticks - Doji CandlesAs traders, if we want to improve our technical analysis knowledge to better develop our price action skills, we owe it to ourselves to grasp candlestick patterns, in this case the Doji candlestick pattern.
This post will go into further detail about this unique candlestick group and will also explain the psychology behind these patterns and how they can affect future price movements in the market.
Before we go into further detail about doji candles, there are times this post will mention the words: 'OPEN PRICE, 'CLOSE PRICE, 'HIGH PRICE, 'LOW PRICE, 'UPPER WICK, 'LOWER WICK, and 'BODY.' So what are these?
OPEN PRICE: Open means a candlestick's first price when it started.
CLOSE PRICE: Close means a candlestick's last price when it ended.
HIGH PRICE: High means how high the price went during that candlestick.
LOW PRICE: Low means how low the price went during that candlestick.
UPPER WICK: An upper wick forms when the high price of the candlestick is higher than the close price (bull candle) or open price (bear candle) of the period.
LOWER WICK: A lower wick forms when the low of the candlestick is lower than the close price (bear candle) or open price (bull candle) of the period.
Body: The visual difference between the candlestick's open and close prices.
What is a Doji candlestick?
The Doji Japanese candlestick pattern is a class of single-bar indecision patterns whose open and close prices are either identical or close to identical and therefore either do not have bodies or have very small bodies. A doji candlestick pattern generally suggests indecision or uncertainty in the markets. The reason for this is because of the psychological meaning behind a doji candle. As previously mentioned, all doji candles' open and close prices are either identical or close to identical, meaning that during the time of the candle's formation, buyers (bulls) and sellers (bears) were both at a complete standoff and neither one came out on top.
There are different types of doji patterns depending on where the open and close prices are, and these types are known as: doji star, gravestone doji, dragonfly doji, long-legged doji, and four-price doji.
Technical traders use the 'doji' term to refer to all of the above patterns but specifically call out a doji by its proper name when they want to be more specific, e.g., a dragonfly doji.
Doji Star
The doji star (also known as 'standard doji' or 'neutral doji') is a pattern that is composed of an upper and lower wick on either side of the opening and closing price that are approximately the same length.
The doji star’s main features are:
Identical or close to identical opening and closing prices.
The upper wick and lower wick are approximately the same length.
Overall, it has a cross shape.
It indicates indecision: the market hesitates between two directions.
When a doji star appears at the top of a bullish swing or at the bottom of a bearish swing, this is seen as a sign that there may be a possible change in the trend. The reason for this is due to the neutral formation of the candle and what it means psychologically: this candle pattern tells us that buyers and sellers were completely equal; it is not possible at this moment to judge which side of the market has the upper hand, so if a doji star appears near the top or bottom of a trend swing, then it is possible that there may be hesitation or uncertainty to continue the trend.
Gravestone Doji
The gravestone doji pattern is formed by a candle that has only the upper wick. This indicates that the price tried to move higher but failed to do so and closed at a price identical to or close to identical to both the open and low prices.
The gravestone doji’s main features are:
A long upper wick.
No lower wick
Open and close prices are identical or close to identical to the low price.
Overall, the pattern has an inverted 'T' shape.
This pattern is most significant at the top of a bullish swing.
It indicates indecision; this has a more bearish bias because of the upside rejection of the high price from the sellers.
The psychology behind the gravestone doji usually indicates that the buyers might be losing power because they can no longer drive the price up and the sellers might be in control. When a gravestone doji pattern appears, especially at the top of a bullish swing, this is seen as a positive sign that there may be a possible change in the trend.
Dragonfly Doji
The dragonfly doji pattern is formed by a candle that has only the lower wick. This indicates that the price tried to move lower but failed to do so and closed at a price identical to or close to identical to both the open and high prices.
The dragonfly doji’s main features are:
A long lower wick.
No upper wick.
Open and close prices are identical or close to identical to the high price.
Overall, the pattern has a 'T' shape.
This pattern is most significant at the bottom of a bearish swing.
It indicates indecision; this has a more bullish bias because of the downside rejection of the low price from the buyers.
The psychology behind the dragonfly doji usually indicates that the sellers might be losing power because they can no longer drive the price down, and the buyers might be in control. When a dragonfly doji pattern appears, especially at the bottom of a bearish swing, this is seen as a positive sign that there may be a possible change in the trend.
Long-legged Doji
The long-legged doji pattern is just like the doji star, but with a longer upper and lower wick on either side of the opening and closing price. This pattern suggests not only market uncertainty but also more market volatility due to the longer wicks on either side.
The long-legged doji's main features are:
Identical or close to identical to the open and close prices.
The long upper wick and the long lower wick are approximately the same length.
Overall, it has a cross shape.
It indicates indecision and higher volatility; the market hesitates between two directions.
Four-Price Doji
The four-price doji pattern (also called 'doji of four prices') is the rarest doji pattern type; it is extremely rare on the chart, especially on the higher time frame charts. It represents a straight horizontal line (only the body, without any upper and lower wicks). The pattern is formed when all four prices are the same: open, high, low, and close.
The four-price doji's main features are:
Completely flat horizontal body with no upper or lower wick.
Overall, it has a 'dash' shape.
Open, high, low, and close prices are all identical.
As rare as this doji pattern is, it does form from time to time. This happens either on very low-liquid assets or when volumes severely drop on the market, for example, during holidays or near the start or close of a trading session.
Be careful with short time frames!
Doji candles appear far too often in shorter timeframes; traders on short-term timeframes do not generally take them as serious signals for predicting future price movements. Doji candles on shorter time frames are not as psychologically impactful as doji candles that form on longer-term charts. A big reason for this is due to the fact that it is a lot easier for a doji candle to develop in a shorter time frame than in a longer one. For example, it is far easier for a one-minute candle to have an identical or close to identical open and close price than it is for a daily candle to have an identical or close to identical open and close price. Additionally, short-term timeframes feature a lot of price noise, which can be confusing for traders.
EURUSD 1 Minute Chart
As you can see in the image above, doji candles appear too many times in the shorter time frames to be effective.
Advantages and Disadvantages
With all technical analysis methods in the financial markets, there are advantages and disadvantages to them, and doji candle patterns are no different. The advantages and disadvantages of doji candle patterns are:
Technical traders use Japanese candlestick patterns to help understand and predict future price movements. Doji candles can be very effective in doing this, and traders should pay attention to them when they form on their charts as they can provide potential trading opportunities. However, due to their limitations, traders should use additional technical analysis methods alongside any doji pattern to predict future price movements. Doji candles are indecision candles and therefore do not guarantee trend reversals, but make sure you are cautious of them, observe them, and, most importantly, learn from them!
Trade safely and responsibly.
BluetonaFX
Backtesting GBPNZD WB 07/24Order Block Strategy Overview:
The order block strategy is based on identifying key levels in the price chart. Order blocks are essentially areas on the chart where institutional traders placed significant buy or sell orders. These orders can create strong levels, which are relevant to other market participants. The strategy aims to capitalize on potential market reactions when the price returns to these order block areas.
Step-by-Step Guide to Trading with Order Blocks:
Step 1: Identify Order Blocks
Begin by analyzing the price chart of the asset you want to trade. Look for areas where the price has shown a significant change in direction, forming clear swing highs or lows.
These swing highs and lows may represent potential order blocks where institutional traders executed large orders.
Step 2: Confirm Order Blocks
To validate an order block, look for a price move that shows a strong impulse (sharp price movement) followed by a consolidation or a pullback.
The consolidation or pullback phase indicates the potential presence of buy or sell orders, confirming the order block's relevance.
Step 3: Draw Levels
Once you've identified the order blocks, draw horizontal lines to mark the levels created by them.
These levels act as areas of interest for potential future trades.
Step 4: Analyze Price Action
Observe how the price behaves around the identified levels.
Look for signs of price rejection (pin bars, doji candles, or engulfing patterns) that indicate the market's reluctance to move past those levels.
Step 5: Plan Your Trade
If the price approaches a bullish level, consider going long (buying) if you observe bullish price action, suggesting a potential bounce from that level.
If the price approaches a bearish level, consider going short (selling) if you observe bearish price action, indicating a potential reversal from that level.
Step 6: Set Stop-Loss and Take-Profit Levels
Always use proper risk management to protect your capital in case the market moves against your position.
Set a take-profit order at a reasonable target level based on your analysis. This could be the next level.
Remember:
The order block strategy is not foolproof and carries risks like any other trading approach.
Always practice proper risk management to protect your capital from significant losses.
Never trade with money you cannot afford to lose.
It's important to conduct further research and practice trading with order blocks on historical price data or in a demo trading account before implementing this strategy in live markets. Additionally, consider combining order block analysis with other technical or fundamental indicators to increase the robustness of your trading decisions.