Higher Probability Entries Using Candlesticks
By Richard Krivo, Course Instructor
A good example of this is shown on the 4 hour chart of the NZDUSD pair below…
A Shooting Star candle, as seen above, at the top of a bullish move signals a reversal in price action…in other words, a move to the downside. When checking the Daily chart of this pair, however, there is a strong uptrend that is in place. Hence, a trader would ignore this “counter trend” signal.
The blue Bullish Engulfing candle on the chart, however, signals taking a buy position. In this instance the trader would take the trade since it signals a higher probability trade…one in the direction of the overall trend.
Once the Bullish Engulfing candle closes, the trader would enter the trade at the open of the next candle with a stop below the lower wick of Bullish Engulfing Candle.
- Today’s Call: EURJPY – Bullish above 115.93 (tradingfloor.com)
- US Dollar Traders Have to Monitor Debt Talks, Euro Market, Risk Trends (managemenresiko.wordpress.com)