Get Rid of Overtrading Once and for ALL

Overtrading refers to taking so many trades to the extent that the trader’s edge erodes. It is bad for all kinds of traders and even investors. But it is truly a cardinal sin for day traders.

I know this day trader called Hubris. He has always been a profitable trader, or so he claims. Hearing that he is such a wonderful trader, I grabbed the chance to watch him during one of his trading sessions.

Yes! 2 points in pocket. This is easy.

Let’s see… oh, there’s another trade over there. I’m shorting right now, just in time.

Ah, lost a point. We’ll only get better. See! Right there, there’s a chance to recoup my losses.

Sheeeesh, two losses in a row mean that the next trade will be a winner. I must continue.

At the end of the session, Hubris wonders how did he manage to wipe out 30% of his trading account in a single session.

Does Hubris’ experience sound familiar? Does it sound like you?

If you answered yes, then you might be able to make vast improvements in your trading performance after reading this article.

THE ROOT OF OVERTRADING

UNREALISTIC EXPECTATION OF MARKET VOLATILITY

Day traders need volatility to make a living. When the market is not going anywhere, we should not trade.

However, because of a lack of understanding of the market and the need to trade, traders rationalize and tell themselves that the market is going to move.

Dr. Brett Steenbarger, the author of The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist, explained this mismatch of expectationsreally well on his blog.

OVERESTIMATION OF TRADING SKILLS

This is Hubris. He thinks he cannot lose, and is invincible in the market. He might understand the market well, but he does not know himself.

He over-estimates his trading skills and is confident that he can trade in any market condition.

THE COMMON WORK ETHIC

Our innate work ethic dictates that we must work for income. That is perfectly correct.

What is wrong is the meaning of “work” for traders. Traders tend to think that work means taking trades. That is wrong, and that is what leads to overtrading.

We are working when we are waiting for the best trade.

We are working when we are following our trading rules and executing the trades.

We are working even when we are not taking trades. And if we do our work correctly, we will get paid.

FIXING OVERTRADING – THE ONE BULLET ACTION PLAN

THE SUPREME RULE TO COUNTER OVERTRADING

The One Bullet Action Plan has just one simple rule.

Take only one trade a day.

No exception. No rationalization.

Take one trade. If it’s a winner, shut down your trading terminal. If it’s a loser, shut down your trading terminal.

After shutting down your computer, go do something you enjoy. Play with your kids. Read a book. Do something that takes your mind off trading.

WHY DOES IT WORK AGAINST OVERTRADING?

As we discussed above, the causes of overtrading are psychological and diverse. They mostly involve our minds playing games with us.

So our solution focuses on physical actions. (Shut down the computer and go play.) Instead of convincing your mind, let’s move away physically .

There is only one simple but absolute rule. The more rules there are, the more space for your mind to convince you to take another trade. Having only one absolute rule denies your mind of rationalization.

ARE YOU SURE TAKING ONE TRADE A DAY IS A GOOD IDEA?

Your mind is already trying to rationalize away this supreme rule. So let’s get it out of our way.

Knowing that you have only one bullet will force you to take only the best trades. You will be more alert and more selective in your trades. More likely than not, your trading performance will improve.

Taking one good trade a day is enough for your trading edge (if any) to materialize. Assuming you do have a trading edge, how much you can earn depends on the amount of your risk capital.

There is also the problem of undertrading which means that we are not maximizing the full potential of your trading strategy.

Don’t worry about that. Far more traders ruin their account because of overtrading compared to undertrading. In fact, no trader has ever lost their trading account by not taking a single trade.

CONCLUSION – YOU MUST STOP OVERTRADING

You must stop overtrading because it is a huge obstacle to your trading success.

You must stop overtrading because only you can do it. Although the One Bullet Action Plan works against overtrading, you have to commit to it.

Don’t be like Hubris. My other friend, Sophrosyne, is a better trader. 

Now, you knew this already. 

Will you add this on your #NotesToSelf trading journal? 

#CuttingLosses 

Source: Galen Woods

Risk Management Strategies for Forex Traders

Capital Preservation is the most important foundation of trading. 

what will be your maximum allowable loss-profit ratio? 

#RiskManagement

6 Factors That Influence Exchange Rates

These are could influence in exchange rates although 

trade what you see not what you think.  

You can only trade what the market gives you. 

What would you like to add? 

You can also find more infographics at Visualistan

The Importance of Forex Regulation

The Forex market is the world’s largest financial market so far. In a globalized economy, the importance of the Forex market to the everyday consumer cannot be underestimated. The rate a currency can be exchanged in the Forex market determines the price consumers pay for products, vacations, the interest rate on deposits and loans and the rate of the return of our investments. Despite the importance of the Forex market, it continues to be largely unregulated.

Forex transactions can be classified into two types – speculative and commercial. A speculative transaction is a transaction taken merely to make profit from currency moves. A commercial transaction is a transaction that is backed by underlying economic activities, such as loan to an overseas company or payment for an import.

In the Forex market, speculative transactions widely exceed commercial transactions and account for larger portion of Forex trading volumes over the years.

Online Forex trading by retail investors has expanded in the past years, with transactions contributing from about 125 billion USD to 150 billion USD in daily Forex turnover. Apart from the evident risks such as large losses due to excessive leverage and fraudulent activities, Forex investors must be familiar with the following risk factors:

Information disadvantage: Retail investors are succumbed to disadvantages in the unregulated Forex market since they do not have access to information about large commercial transactions which is available only to the big investors who dominate the market. This information lack of balance makes it harder for the average retail investor to gain advantage over the professional investors.

Heightened Volatility: The rise in speculative activity, in particular high frequency trading dominated by algorithmic trading, might result in higher currency volatility, which increases the risk of runaway losses for the small investor or trader.

While the Forex market regulation was almost nonexistent in the past years, the swift growth of Forex trading among retail investors has led to regulation by commercial bodies such as Commodity Futures Trading Commission (CFTC). The CFTC has jurisdiction over Forex transactions in the US, and it requires all Forex brokers to be registered and meet financial standards set by the National Futures Association (NFA).

The biggest risk in non-regulated Forex trading is that of fraudulent activities, which include boiler room tactics, excessive fees generated by churning trading accounts, Ponzi schemes and misrepresentation.

With almost 27,000 US traders having lost 460 million USD in Forex trading between 2001 and 2008, the growth in Forex fraud cases led the CFTC to set up a dedicated task force to deal with the problem.

Strict regulations introduced in the US IN 2010 in order to protect Forex traders have exterminated Forex fraud in the US to a large extent. However, in other countries the regulation status has remained mixed.

In Japan, the Financial Services Authority (FSA) proactively regulates Forex transactions. One of its achievements is lowering the maximum leverage that is available to Forex traders to 25:1 in August 2011, after cutting it to 50:1 the year before. In the UK and continental Europe, regulation is limited and leverage has few limits, with levels reaching as high as 200:1.

For institutional traders, local central banks regulate Forex market. However, there isn’t any global regulator for the worldwide Forex market. There are several reasons why institutional Forex regulation is necessary:

High Hedging Costs: Increased currency volatility caused by excessive speculation results higher costs incurred by corporations and other commercial players for hedging currency risks

Preventing Enrichment of a Few at the Expense of Millions: Exaggerated or unjustified currency transaction can adversely affect a nation’s economy. Even though such moves may be supported by underlying economic fundamentals in some cases, in many other cases temporary weakness in a currency can be brutally exploited by speculators, sending it into free fall. This may result in capital flight and a prolonged recession rushed by severely higher interest rates in order to defend the currency.

A regulatory levy such as the Tobin Tax may restrain wild Forex speculation by retail and institutional traders and may offset the costs of more Forex regulation. However, any suggestion to introduce regulation for the institutional Forex market is likely to meet opposition by major currency traders. As a business owner or investor, you may occasionally have a justifiable need to trade Forex to hedge currency risk for your business or investment portfolio. But be watchful of the risks of speculative Forex trading.

Do a diligence research before putting a Real Money on your Trading Broker, 

what else do you want to include as a reminder?  

Written by: Trading Growth

Greed vs Loss: How Take Profit Levels Can Help

The forex market moves fast — and so do emotions.

It can be difficult to separate your emotions from forex trading entirely; as everyone gets a little stressed when a trade is going poorly and a little too aggressive when a trade is going well. This is human nature. Your trading plan can quite easily be disrupted and turn into a battle of greed versus loss.

This is why take profit levels are vital. Take profit levels are often incorporated into forex strategies in order to defeat the natural human inclination to allow a trade to ride when it is performing well. Many traders will feel as though it’s best to wait while a trade continues to take the most amount of profit possible. But this can also lead to a situation in which profit is actually lost because of a sudden downturn.

Try reading: When to Demo Trading to a Live Account

Here’s everything you need to know about how take profit levels can help…

Setting Up Different Take Profit Levels

You may know what a “take profit” is, but what is a take profit level?

When you set a take profit, you set a specific price at which the trade should close. This is used to capture your profit automatically the second that the price hits that number. A take profit level is the price level at which a take profit action occurs. Take profit levels are multiple, staggered levels that are used to control a trade.

A single currency trade may have multiple take profit levels — usually done by creating multiple trades in the same direction. For instance, there may be a take profit action set at every increase at 20 pip intervals. These take profits are designed to capture profit as quickly and reliably as possible. The first take profit level will generally be initiated quickly, making the trade profitable early on.

Take profits are generally mixed with stop losses as well, so that there is more room for profit and less room for loss. All of this creates a reliable trade management strategy that completely removes emotion from the equation.

The Emotional Benefits in your Trading

Forex strategies need to be consistent if they are to be profitable. That being said, every trader occasionally has an emotional moment, during which they may either close a trade early or let it ride.

If you have an inconsistent trading strategy, there’s no way to improve upon it. Though you may be able to make money short-term, you won’t know what portion of your strategy is actually working or not. Eventually you will find that your strategy turns; it’s impossible to maintain consistent results with inconsistent trading.

Take profit levels completely remove the potential for an emotional impact on trading. Rather than having to make a snap decision regarding when you will take profit on a trade, it will already be set for you — all you need to do is avoid deviating from the plan and changing the trade itself. In fact, with the appropriate take profit and stop loss levels set, you don’t even need to manage your trading; you simply need to initiate new trades and work towards an even more profitable trading strategy.

The Market Benefit of Take Profit Levels

Take profit levels aren’t just about your emotional status. Some traders aren’t emotional and are more than able to control themselves when they’re dealing with the forex market. But there are some things that are simply beyond human ability.

Tracking the forex market in real-time can be one of these things.

The forex market changes very quickly and this can be even more true if you’re trading a currency pair during a time of particularly high volatility. It’s possible that a level of profit could be hit upon very suddenly and then lost entirely thereafter; in other words, the market can spike suddenly and then retreat.

If you’re relying upon your own reflexes, you’ll need to watch the market constantly and you’ll have to be able to react very quickly to the market change. You could potentially miss your chance and a profitable trade could become a losing one.

This can be avoided through the use of a take profit of course.

A take profit will capture your profit even if the take profit amount is only held for a brief moment. You won’t need to watch the market or your account 24/7; instead you’ll be able to trust that the trade will close exactly when you want it to.

A take profit level also enables you to use far more complex strategies. It can be impossible to track multiple currency pairs and multiple take profit levels, which means that you may have to take profit only once if you’re relying on yourself to close the trade.

By setting automated take profit levels, you streamline the forex marketing monitoring process and take the burden off of yourself.

Identifying Your Take Profit Levels

How do you determine which take profit levels you use?

It differs for each strategy. Most take profit levels are staggered, with three to four take profit levels focused on the lower limit and upper limit of what you believe the currency pair will hit. But the analysis that is generally used to determine a take profit can be quite complex, based on a variety of key performance indicators and strategies.

For instance, in a support and resistance strategy, the take profit may be set a little above the current market price, a little under the resistance price, and in between. This would secure profit just as the trade moved upwards and as the trade met its resistance price — in addition to the area between these two. Even if the trade never met its resistance price, at least two of the take profits may still be initiated. The stop loss would then be set to still ensure a profitable trade even in the event that this occurred.

See our guide on choosing a trading strategy for help.

Of course, it’s very difficult for traders — both new and accomplished — to determine their own take profit levels, even if they are very knowledgeable about analysis and strategy.

This is where forex trading signals often come in…

Live forex trading signals tell the trader exactly how to initiate their trade, including which take profit levels and stop loss levels they should use. These signals use a significant amount of analysis and past market behavior to determine the way that the currency trade will likely go. They are able to use their algorithms to find the most profitable trades, which includes both take profit levels and stop losses.

For many traders, live forex signals are the best way to trade without having to invest a significant amount of time into the process.

To put it simple, Use Take Profit Levels!

Regardless of what technical analysis and what strategy a trader may be using, take profit levels are an intelligent way to trade.

A take profit level ensures that the investor will be able to capture profit according to their plan. Many trading signals incorporate take profits for just this reason. Take profit levels free up an investor to step away from the computer and to trust that their trades are being closed as they should be.

Avoid the temptation of emotional and irrational trading by not engaging in the battle of greed versus loss. Start using take profit levels in your trading from today. 

Written by FxPremiere

Placing Take Profits is equally important as placing Stop Loss,

what else do you suggest on this?  

6 Factors that Influence Exchange Rates

You can also find more infographics at Visualistan 

what would you like to add?

Trade Forex Like a Sniper…Not a Machine Gunner

  

Today’s Forex Lesson is “Awesome”. In fact, It’s probably one

of my best trading lessons I have ever written. It took me at least 2 days of brain power and probably 20 coffees.  Please pay it forward, share it with others. Enjoy.

A sniper in the military has an edge over his or her enemy; their edge is unwavering patience, mastery of their weapon, and the ability to remain consciously in control of their mind and body for long periods of time in high-stress situations. We can apply these same concepts to Forex trading…

Forex trading is very similar…you need a trading edge (weapon), you have to master this edge, you need to develop and maintain rigid self-discipline and control, and you have to execute your edge flawlessly in the face of constant temptation to over-trade and over-leverage. Now, trading is nowhere near as stressful as war, but it still requires conscious control of mind and body.

Those traders who learn to pick and choose their trades wisely, trading like a Forex “sniper”, are typically the ones who succeed long-term, whereas those traders who act like machine-gun traders by shooting at everything they see (trading too much), tend to run out of ammo (money) very quickly and fail to accomplish their goals in the market. Let’s discuss how you can learn to trade like a sniper instead of shooting at everything (taking every trade) that comes your way…

• Accept that less is more in Forex trading

One of the things that we traders can learn from a sniper in the military is that in certain situations less is indeed more. Forex trading is definitely a “situation” where less is more. However, it is very common for beginning traders to feel that more is better; more Forex indicators, more trades, more analyzing, more money on useless trading robots, etc.

What is the result of such misinformed beliefs? The result is almost always over-trading; indeed, most beginning Forex traders are like machine-gunners; spraying bullets (money) at everything they deem to be a trade and likely causing more damage to their trading accounts than good. The first step that you need to make if you want to trade more like a sniper and less like a machine-gunner, is to truly accept that less is more in Forex trading.

Just like a sniper waits patiently for his or her pre-determined target to come into view; you need to learn how to wait patiently for your pre-defined trading edge to show itself in the market. As price action traders we have a very effective trading edge that allows us great opportunity to trade the market with sniper-like precision, and the daily charts provide the best “battleground” for us to execute our edge on.

• Higher time frames

As I mentioned previously, the daily chart should be your “battleground” for developing your ability to become a Forex sniper. Why, you ask? Because it is the daily chart that gives us the “highest value” or highest-probability targets when compared to any time frame below it. Weekly charts are also accurate, but they don’t give us enough targets each month and they are less practical to trade than the daily chart.

These targets are price action setups, and you should think of them as higher-value on the higher time frames, because in reality the higher the time frame the higher-probability the setup becomes. This is the primary reason that trading higher time frames drastically increases trading success. Think about it this way; a sniper is on a pre-planned mission to take out high-value targets that can change the course of a war, and in Forex trading you should be looking for the highest-probability trade setups that can have the greatest positive impact on your track record.

Machine-gun trading the lower time frames is not going to do anything but cause you to lose all your ammo or money a lot faster than you think. There is really no sense in ever trading any time frame below the 1hr chart since the value or probability of the targets or setups decreases dramatically as you move lower in time frame. You want to stick to the high-value or high-probability setups of the daily chart as much as possible, and especially while you are still learning to trade.

• Patience

If there is one thing that a sniper in the military definitely IS, it’s patient. Patience is like the “magic” ingredient that makes everything work for a sniper in the military, and it is also the “magic” ingredient that you will need to use if you want to become a Forex sniper. Most beginning traders lose money in the markets, and most beginning traders are also anything BUT patient. See the connection here?

There is a tendency for traders to want to “force” the issue of trading by manifesting signals that aren’t really there or by jumping into a signal that has not closed out yet. When it comes to money it is human nature to be impatient, this is otherwise known as greed, but if you don’t learn to become a patient Forex trader, you will never forge the type of overall self-control that it takes to succeed as a Forex trader and become a Forex sniper.

• Mastery of strategy

A sniper will train for years to sharpen and perfect his or her shooting skills, and a sniper knows exactly what their target looks like and pulls the trigger without hesitation. Similarly, you will need to “train” with the particular Forex trading strategy you choose to employ in the markets so that you know EXACTLY what you are looking for every time you open your charts. However, you will need to do more than that; you will need to truly MASTER the Forex trading strategy that you choose, because if you don’t master it, you will never achieve your full potential as a Forex sniper.

Mastering a trading strategy begins with education. If you choose to employ high-probability price action trading strategies, I can provide you with the Forex trading training you will need. However, you must put in the time and effort to learn and master it; I cannot do this for you. You need to be realistic about this, it will take time; it takes time to become a master at anything, and Forex trading is no different. But, if you put in the necessary time and take advantage of the insights discussed in this article, you will begin trading like a sniper sooner than you might think.

• Developing a sniper-like Forex trading mindset

Sniper-like Forex trading breeds confidence and discipline. The more you strive to trade like a sniper and less like a machine-gunner, the more your Forex trading confidence and discipline will improve. This is because you will be rewarded for patience, and as you start to see your patience pay off over time, you will want to maintain it.

It is the initial stages of developing a sniper-like Forex trading mindset that most traders fail at, usually because they do not understand the power of patience and discipline. It tends to feel better to be a machine-gun trader because you feel powerful and “in control”. The problem with this mindset is that you can never control the market, in fact, the more you try to control the Forex market the more it will actually control you. The only thing you CAN control is yourself by learning to trade like a sniper, and if you do this you will significantly increase your chances of success as a Forex trader. 

Quality over Quantity, 

will you filter your trade to get the best trading idea? 

Source by: Nail Fuller 

Why do candlestick patterns work? Learn to trade price action

Price action and candlesticks are a powerful trading concept and even research has confirmed that some candlestick patterns have a high predictive value and can produce positive returns. Especially interesting is a research paper by Gaginalp and Laurent in which they showed that the candlestick patterns: Three White Soldiers, Three Black Crows and Three Inside Up have a significant short-term prediction value for the course of price. ¹ Their research showed that those patterns are predictive about 75% of the time for most of their data sets.

Why do candlestick patterns work?

Traders often mistakenly believe that the patterns themselves drive the markets. The first important thing you have to know is that you can’t treat candlesticks like blueprint templates although 99% of all trading websites teach this wrong approach. Only when a trader knows how to “read candlesticks“, he will be able to understand what the patterns tell him about the underlying market dynamics and the behavior of traders.Candlesticks are no magic trading tool, they are just a way of visualizing price movements.

The trader who can follow the path of price and knows how to interpret the thought-process of other financial players can take advantage of this knowledge and use price action to his advantage.

Trading is all about mass psychology and candlesticks are a manifestation of crowd behavior.CLICK TO TWEET

Two proven candlestick patterns

As mentioned earlier, there are a few patterns which seem to have a much greater predictive power and we will now examine two of those patterns to gain a better understanding of how to read the information provided by candlesticks and price action. Afterwards, we will take a look at the most important dynamics that allow you to understand any candlestick pattern.

Three Black Crows. The Three Black Crows pattern is a powerful bearish pattern because it nicely shows the fight between bulls and bears. Each candle opens higher than the previous close, but every time bears take over and push price back down again, making a new low each time. The Three Black Crows pattern shows that, although bulls create a gap up, they don’t have the power to push price higher during active trading hours. Bears are in control. Often, the Three Black Crows pattern is followed by a strong sell-off once the bulls finally give up and stop pushing price higher.The Three White Soldiers is the opposite, bullish, version of the Three Black Crows.

Three Black Crows bearish candlestick pattern

Three Inside Up. The Three Inside Up pattern is an extended version of the well-known Inside bar pattern. The initial bearish candle is followed by a small bullish candle and the whole second candle typically falls into the range of the previous candle. The smaller second candle shows a change in sentiment: the initial bearish price move stopped and markets consolidates. If the smaller second candle has a wick sticking out, it usually is a much stronger indicator for an upcoming shift in direction. The third candle is a larger bullish candle which breaks above the high of the first candle, finally confirming the change in direction. The Three Inside Up pattern is a reversal pattern because it shows the slowly changing sentiment of market participants from bearish to bullish.

Three Inside Up reversal candlestick pattern

This is what you need to know about price action

There are many dozens of candlestick patterns out there, but we highly discourage you from trying to remember all of them – it won’t make you a better trader. Instead, learn to read price and what the way price moves tells you about what is going on in the markets. The way we explained the thought process behind the Three Black Crows and the Three Inside Up pattern should be applied to all candlestick patterns and price action. Once you understand that it’s not about identifying exact patterns, but about knowing how to read price movements, you can analyze charts in a completely new way.

There are three main components of any candlestick pattern:

1. The sizeAre candles getting larger or smaller? As seen in the example with the Three Inside Up pattern, the candles first become smaller (indicating a shift in sentiment and bears leaving the arena) and then become larger again when the bulls take over. When analyzing price action, always compare the size of the most recent candlesticks to get an idea of what is going on.

2. The wicks (shadows)

Wicks can provide a variety of different information: A wick can show the rejection of a price level like on the Pinbar pattern, but it can also show indecision in the markets like on the Doji pattern when wicks stick out to both sides and a large candle without wicks often indicates greater strength and more conviction.

3. The close

As mentioned earlier, a candle that closes near the high or low and thus does not have wicks, often shows greater strength. Analyzing the close of a candle in combination with the size can provide meaningful insights about the current strength and the balance between bulls and bears. When price is trading into important support and resistance levels, the close also be a very important tell and it can often indicate the likelihood of levels holding or breaking.

You can apply those three concepts to all other candlestick patterns out there and you’ll very quickly realize that the only thing you need to know about candlestick patterns are those three aspects. Here is what we mean by this:

Pinbars: A meaningful pinbar is usually relatively large in comparison to prior price action. The wick should be long and stick out into the opposite direction of the ongoing trend to show the shift in direction. And the close should be very near the top/bottom and only leave one wick to confirm the sentiment change into the new direction.

Doji: A doji signals indecision and, therefore, it is usually smaller than past candlesticks. A doji typically has long wicks to both sides which further illustrates the indecision and the close is very near the middle of the candle. You can see that all three clues (size, close and wicks) point to indecision.

Engulfing: The engulfing pattern shows a reversal and the clues are very obvious. The first candle is usually small and indicates a temporary pause in the ongoing trend. Then, the next candle is typically much larger and the small candle completely falls into the range of the large bar. This shows that the trend pause is over and that markets have changed their mind. The large bar usually has a very strong close near the top/bottom with very small wicks, further confirming the strong trend change (see infographic below).

As you can see, every single candlestick pattern can be dissected easily by analyzing the size, the wick and the close of the candles. Thus, you can stop remembering arbitrary patterns and focus on reading real price.

Two components of price action trading

Besides understanding what a single candlestick pattern tells you, there are two additional concepts that will help you identify high probability price action signals and avoid signals that fail more often. When trading price action, it’s important to be very selective and not jump on any one signal; blueprint-thinking and looking for fixed rules should be avoided.

1. Comparing candlesThis is often a very overlooked aspect of price action trading because most traders just look for blueprint patterns and focus on individual candlesticks. However, if you want to trade price action successfully, you have to set recent price action in relation to what has happened before. A small pinbar after a trend wave with large candles is less meaningful than a larger pinbar after a trend with small candles; an engulfing candle that just barely engulfs the previous one has less predictive power than a candle that engulfs the previous one easily. Always look at your chart as a whole to put things into the right perspective.

2. Location

The concept of location means that you only trade price action signals around high probability price levels. Instead of jumping on every price action signal you see, you can significantly increase your odds by only trading around high impact support and resistance areas or supply and demand levels. Although you need to be more patient, your trading will benefit significantly as well.

And that’s all you really need to know when it comes to understanding candlestick patterns and price action trading. Don’t make it more complicated than it has to be and focus on what is really important. Don’t forget: candlesticks are just a way to visualize price information – it’s a manifestation of crowd behavior in the markets. Candlesticks are typically not meaningful to trade them by themselves, but by combining price action with other trading concepts, you can generate a robust trading methodology.

How to read candlestick patterns?

Source by: Rolf