The 3rd shortest candlestick forex trading strategy is a purely based on price action trading using candlesticks.
If you love forex trading strategies based on price action, this is one of them.
Timeframes: best for 4hr and Daily timeframes
Currency Pair: Any
Forex Indicators: none
BACKGROUND
If you’ve been trading for a while, you will notice that there are days when the candlesticks will start to get very short in length compared to the previous candlesticks.
Why this happens can be explained with these points below:
the market may be in a strong uptrend, you will have lots of bullish candlesticks showing on your charts. The the market starts to slow down and this is reflected by the length of candlestick becoming very short (Difference between the High and Low becomes small).
in a downtrend market, you will see lots of bearish candlesticks showing on your charts which a quite long but soon they start to get shorter as the market losses the downward momentum
The key word here is momentum.
What you are looking for is a loss of momentum. A loss of price momentum can be seen when there’s a period of increasing candlesticks lengths as price picks up steam and then this changes when the candlestick lengths start to become very short.
You can see this phenomenon in all timeframes. All you need to do is open up your charts and have a loot to see what I’m referring to you here about.
HOW DO YOU TRADE THE LOSS OF MOMENTUM?
The thing is, where there is a loss of momentum occurs, this is a temporary thing only. Expect the trend to continue in the same direction or in the opposite direction.
There’s a few ways to trade the loss of momentum in anticipation of a breakout. What I’m going to show you here is by looking and counting the candlesticks.
Well, you do this by looking for the third shortest candlestick.
WHAT IS THE THIRD SHORTEST CANDLESTICK?
The third shortest candlestick is the third shortest candlestick from the 2 previous candlesticks before it.
This means the 2 previous candlestick should be long: The difference in pips between their “highs” and “lows” are big.
When I say short, I mean unusually short or extremely short and this depends on the timeframe you are viewing the candlestick in as well.
So how do you pick your first candlestick then?
Answer: you start at the current candle that is forming and monitor the lengths of each candlestick that forms. Whatever candlestick that is unusually short in comparison to the the first 2 candlestick is the one you are interested in.
Rules guiding this stragies will be coming soon in my next post
If you love forex trading strategies based on price action, this is one of them.
Timeframes: best for 4hr and Daily timeframes
Currency Pair: Any
Forex Indicators: none
BACKGROUND
If you’ve been trading for a while, you will notice that there are days when the candlesticks will start to get very short in length compared to the previous candlesticks.
Why this happens can be explained with these points below:
the market may be in a strong uptrend, you will have lots of bullish candlesticks showing on your charts. The the market starts to slow down and this is reflected by the length of candlestick becoming very short (Difference between the High and Low becomes small).
in a downtrend market, you will see lots of bearish candlesticks showing on your charts which a quite long but soon they start to get shorter as the market losses the downward momentum
The key word here is momentum.
What you are looking for is a loss of momentum. A loss of price momentum can be seen when there’s a period of increasing candlesticks lengths as price picks up steam and then this changes when the candlestick lengths start to become very short.
You can see this phenomenon in all timeframes. All you need to do is open up your charts and have a loot to see what I’m referring to you here about.
HOW DO YOU TRADE THE LOSS OF MOMENTUM?
The thing is, where there is a loss of momentum occurs, this is a temporary thing only. Expect the trend to continue in the same direction or in the opposite direction.
There’s a few ways to trade the loss of momentum in anticipation of a breakout. What I’m going to show you here is by looking and counting the candlesticks.
Well, you do this by looking for the third shortest candlestick.
WHAT IS THE THIRD SHORTEST CANDLESTICK?
The third shortest candlestick is the third shortest candlestick from the 2 previous candlesticks before it.
This means the 2 previous candlestick should be long: The difference in pips between their “highs” and “lows” are big.
When I say short, I mean unusually short or extremely short and this depends on the timeframe you are viewing the candlestick in as well.
So how do you pick your first candlestick then?
Answer: you start at the current candle that is forming and monitor the lengths of each candlestick that forms. Whatever candlestick that is unusually short in comparison to the the first 2 candlestick is the one you are interested in.
Rules guiding this stragies will be coming soon in my next post
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