- Always wait for the daily closing of the candle to determine the next movements.
- Lows are determined by rising candles, while highs are determined by falling candles.
- A penetrating bullish candle closure on a formed low, the return can be between 30% - 50% of the candle.
- A rising candlestick closure with little volume in a formed low, the return can be between 100% - 140% of the candle.
- Diagonals should be drawn above each high and low formed during the move.
- When the trend accelerates, the price will not touch the support diagonally and will form a new trend angle to be plotted, if the new support is broken, we should expect a retracement to the previous trend angle.
- Patterns can also be imperfect in their shapes, however, a proper count of highs and lows allows you to keep reading the price.
- A high formed by a long wick is a sign of a high taken offer, the price can start to form a rising wedge or fall drastically.
- A minimum formed by a long wick is a sign of a strong area of demand taken, the price can start to form a falling wedge or rise dramatically.
- If the high range of a pattern is exceeded by the closing of a candle, the price will continue to rise to a new zone of supply, if the subsequent retreat remains above that range, the chances of continuing upwards are very high.
3 useful tips when deciding to do an operation:
- Never forget that the odds of a long trade being a winner increase when your entry is as close to the demand zone as possible.
- Don't make your entry immediately when the price reaches a demand zone, always expect the price to form an HL above the previous low, if the price action does not show a reversal pattern, the price will not go up.
- Never forget to place your stop losses, they allow you to save time and adjust your loss tolerance based on the risk level of the current scenario.
You can follow me on Twitter: https://twitter.com/armijogarcia