If You Knew This Candlestick Pattern Strategy, You Would Likely Already Be Profitable...
Published: 2022-02-12
Status:
Available
|
Analyzed
Published: 2022-02-12
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker will share a specific candlestick pattern combination and confluence strategy for trading.
"i'm gonna share with you that combination of candlesticks along with the confluence i like to use to give myself the best opportunity for success in a trade using these candlestick patterns"
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Speaker places a trade with a specific stop loss, a 1.4:1 reward/risk ratio target, and a 2% risk on the trade.
"i'm gonna go ahead and place my entry here i want my stop loss to be under the zone of structure i've laid out which i'll teach you how to do in this video my first target it's going to be at a 1.4 to one reward risk ratio let me go ahead and create the order market order i'm gonna do a two percent risk on this specific trade and i am involved"
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A specific definition for a 'hammer' candlestick pattern is provided, based on the candle's body being above the 38.2% Fibonacci retracement from low to high.
"i identify these in a very simple and objective way i take a fibonacci retracement from the low of the candle to the high of the candle for a bullish signal if the entire body meaning the open and close of this candle is above the 38.2 retracement i count that as a buy signal or hammer candle"
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A specific definition for a 'shooting star' candlestick pattern is provided, based on the candle's body being below the 38.2% Fibonacci retracement from high to low.
"for a shooting star i take a fibonacci retracement from the high of the candle the highest wick to the low of the candle or lowest wick and as long as the open and close open and close of the entire candle is below the 38.2 retracement i consider that a selling signal or a bearish candlestick pattern similar to a shooting star candle"
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A bullish candlestick pattern is considered more accurate if followed by a green candle.
"what added an incredible amount of accuracy is waiting for this candlestick pattern and then waiting for a green candle right after it"
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A bearish candlestick pattern is considered more accurate if followed by a red candle.
"for a bearish trade it would be the opposite we would wait for the bearish signal candle followed by a red candle for that confirmation candle"
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A past bullish candlestick trade example on Pound Yen played out successfully with a 1.4:1 reward/risk ratio.
"you can see that that would have played out really well just wanted to give you an example of what a bullish version of this looks like on real charts"
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A past bearish candlestick trade example on Pound Aussie played out successfully with a 1.4:1 reward/risk ratio.
"you can see that that would have played out really well just wanted to give you an example of what a bearish version of this looks like on real charts"
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Successful trading involves combining multiple technical factors to create an advantage, rather than relying on a single candlestick pattern.
"what we have to do as traders is combine a number of technical factors that give an advantage when we combine them all"
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A bullish trade is best taken in an uptrend at the end of a pullback, where the pullback aligns with a previous resistance level that now acts as support.
"you want to ensure that price is in a trend which essentially means that we are consistently making higher highs and higher lows in price ... we want to attempt to catch the end of a pullback ... adding the structure level as confluence oftentimes this previous resistance level will act as support"
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Another confluence for a bullish trade is when price pulls back to the previous swing low before the break into new highs.
"the other area is this level of support right here that was the previous swing low before the break into new highs"
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For bearish trades, confluence occurs at previous support levels (which may act as resistance) or previous resistance levels before a break into new lows.
"the previous level of support during a downtrend or the previous level of resistance before the break into new lows"
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The Pound Yen trade example discussed earlier easily hit its targets.
"you can see that that would have played out really well"
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The Pound Aussie trade example also hit its targets.
"and this trade yet again if i hit play you can see hit targets"
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The combination of candlestick patterns, structure, and trend provides a statistical advantage over a large number of trades.
"because these rules these candlestick patterns along with this confluence of structure and trend is what goes together it's the technical factors that come together in order to give us an advantage over a large sample size of trades"
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Achieving a 50-60% win rate with a 1.4:1 reward/risk ratio on a consistent basis leads to significant profitability over the long term.
"if doing this can give me a 60 percent chance to win these trades or even a 50 percent chance to win these trades and i consistently win at a one point four to one ... i'm still going to be profitable by the end of the year in a major way"
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The speaker is watching the resistance area between 1.0819 and 1.0789 on the Aussie/New Zealand pair for potential counter-trend trades.
"the first one is going to be the also new zealand only also new zealand i have a couple of different areas i'm paying attention to for possible trades the first one is between 1.0819 and 1.0789"
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The speaker will look for buy trades in the support area between 1.0650 and 1.0614 on the Aussie/New Zealand pair to continue the uptrend.
"this red area now if price continues lower or push is lower then i'll be looking for a possible buy trade to continue this uptrend between 1.0650 and 1.0614"
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The speaker is watching the area between 76.75 and 76.29 on the New Zealand/Yen pair for possible buy trades, as this area was previously broken resistance.
"on the new zealand yin we actually have an area of structure that i'm paying attention to for possible by trades the reason is because this area on a lower time frame has been resistance before and that resistance level has been broken this level's between 76.75 and 76.29"
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The speaker is observing the New Zealand/Dollar pair for a pullback to a previous support level that may turn into resistance, potentially leading to trend continuation.
"so looking at this pair you can already see that we've had a downtrend happening so far and we've made new lows a new lower high and a new lower low at this point what i was waiting on is to see if price came back up into our previous level of support that could possibly turn into resistance again on a pullback"
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A valid bearish candlestick pattern (shooting star followed by a red candle) has formed on the daily chart of the New Zealand/Dollar pair.
"do we have that 38.2 candle or shooting star candle followed by a red candle well let's check it on the first candle yes the entire body of this candle is below the 38.2 retracement do we have a red candle following that well yeah we do we have a red candle following that so this is a good example of the exact candlestick pattern you've learned throughout this video happening on the daily chart"
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A potential trade entry on the New Zealand/Dollar pair would involve a stop loss above the structure area and a 1.4:1 reward/risk ratio for the initial target.
"if you were going to or excuse me if i was going to enter this trade it would look something like this i would be entering there i would have a stop loss above my entry candle i would actually have a stop-loss above the area of structure that i was paying attention to so something like that again i like to take a 1.4 to 1 reward risk ratio on my first position"
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