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Saturday, July 20, 2013

Understanding Candlestick

You’re trading with the uptrend, and your technical indicators show that prices are likely to keep moving up. You’ve got a good feeling about this…
You enter a ‘Buy’ trade…


But somehow, the market immediately starts moving in the opposite direction!

You watch helplessly as the price continues to move closer and closer to your stop-loss level…
What should you do?
You know you must remain disciplined, and so you watch… and wait.
Finally, barely a few hours later, you hear ‘Ding!’… your trading platform has just informed you that your stop-loss order has been triggered.



That’s another 40 pips down the drain… why does this keep happening?
Over the next 8 hours, you watch in disbelief as the market shoots up 90 pips in your original direction… What!?

You were right all along! If only you didn’t get stopped out so soon…

 Now Let's Go Back In Time...
You’re trading with the uptrend, and your technical indicators show that prices are likely to keep moving up. You’ve got a good feeling about this…
BUT, the recent candlestick activity tells you that now is a bad time to jump in… you’re waiting for the exact time to enter the market.

A few hours pass… and you don’t yet see a bullish signal…

Then suddenly, you see an entry signal based on candlestick activiity – this is what you’ve been waiting for!
You enter a ‘Buy’ trade without hesitation…

You’ve also set a stop loss, just in case.
And just a few hours later… the market shoots up 70 pips!

You smile as you adjust your stop order to protect your profits.
That was simple!

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