CANDLES and other tech things to watch for i am going to keep it simple in here and focus on forex analysis

only : - AN!"N! #AN: o Not a re$ersal %ar&candle' it is an early warning that top may %e coming in( Need )AS* after hanging man %efore trade( o +ells that sellers sent some signals that were re,ected %y the %uyers o Sellers are positioning themsel$es while the %uyers are taking profits' selling pressure increase o -orming after ad$ance o Needs %earish confirmation .gap' long red candle/ - )AS* - "N0E*+ED A##E*: o early warning that %ottom may %e coming in' forms after decline o opposite to AN!"N #AN o Long upper shadow 1 %uying pressure which was not sustained %y %ulls o 2uyers are positioning themsel$es while the sellers are taking profits o +ells that %uyers sent some signals that were re,ected %y sellers o Needs %ullish confirmation .gap' long green candle/ - )AS* o )in %ars at the %ottom of a mo$e with the tail in the direction of the recent mo$e are not 3pin %ars4 %ut an in$erted hammer' when followed %y a %ullish %ar&candle they often indicate the %ottom of a mo$e' not a signal to go short - A##E*: o as to %e at the end of a trend o as to %e lower than pre$ious candle o Shows re,ection of lower prices o "t could %e a continuation %ar&candle 1 depending where it is o "f hammer at S5))6*+ we look for long positions 1 a few pips a%o$e the high 257 S+6)' if the order is not filled 1 another sign that downtrend still in force( "f next %ar "2 1 opportunity to go short o "f hammer closed %elow 89&:9 and "2 closed %elow 89&:9 and weaker :9 holding 89 down 1 it is acting as resistance 1 2ig mo$e ahead o "t could %e a 3floater4 1 continuation %ar' depending where it is in a trend o #ake sure hammer is clearly at the %ottom of a mo$e o ammer at the end of an downtrend trend will ,ump at you if they are the real thing1 pay special attention to position or location o "f it is really a hammer 1 enter %uy stop a%out ;9 pips a%o$e the high of the hammer o ammer fails when its low is exceeded

o ammer needs to %e at the %ottom of a decent leg down .usually 8 %ig pushes/ o ammers often get tested and trigger slowly - S 66+"N! S+A* o #ake sure SS is clearly at the top&%ottom of a mo$e o Shooting Star need to %e at the end of a trend' wick needs to %e free and clear of all other candles and shooting %eyond the high of the pre$ious candles o Shooting Star at the end of an uptrend will ,ump at you if they are the real thing 1 pay special attention to position or location o Shooting Star fails when its high is exceeded o Shooting Stars trigger straight away as people tend to panic more' sell rapidly D2L C 1 Dou%le Low igher Close and D2 LC 1 Dou%le igh Low Close traded in 8 ways: o -irst %reakout when )A %reak dou%le top&%ottom of last two or three candles o Second is when dou%le top&%ottom work as support&resistance o <ait for a %reak of the %ar&candle to enter .high 1 long' low short/ o SL on the opposite end of the %ar o +ake A trades 1 SL' S with -i% *et = C6N-L5ENCE 1 wait for )A to confirm o +A>E + E# A+ SL 6* S <"+ -"2 *E+*ACE#EN+ o Enter at -i% :9' SL a%o$e& %elow the last %ar of the setup o !o long&short at the %reak down of two lows&highs 1 See S&* a%o$e&%elow the set up 1 if one then go in the opposite direction at the %reak out of 8 lows&high %ars

2562 1 2ullish 6utside 2ar' 2E62 1 2earish 6utside 2ar 1 high and low must %e outside the pre$ious %ar&candle with close higher&lower than pre$ious %ar 25E2 1 2ullish Engulfing 2ar' 2EE2- 2earish Engulfing 2ar 1 the engulfing %ody must %e outside that of the pre$ious %ar?s %ody with close %eing higher&lower than the pre$ious %ar o 6utside and engulfing %ars are sensiti$e to where they are in price 1 they can mean re$ersal' continuation' or nothing 1 do analysis %efore acting on them o Long wick on 2EE2' 25E2 1 price %eing re,ected %y strong support&resistance which may ha$e re,ected prices in the past .check it out/( Need a strong close a%o$e& %elow S&* %efore going long&short o )rice must hold a%o$e&%elow 89 o <ait for %earish&%ullish )A and trade with the trend o 2E62 or 2562 are %est traded when at the top&%ottom of the trend

o +he lower&higher 1 further down&up the trend they are in the trend 1 the riskier they %ecame o <e need confirmation 1 the %ars need to %e pro$ed first o 5se them as set up %ars o "t is "#)6*+AN+ to know and understand where these close with respect to pre$ious .mother or controlling/ %ar&candle +wo or more matching highs or lows which is %roken 1 5S5ALL7 means a resumption of the current trend +wo matching lows&highs are only $ia%le with a defined trend +o @ualify as )rice *e$ersal 2ar&Candle you must ha$e: - correctly proportioned candle - correct close relati$e to pre$ious candle - correct position relati$e to pre$ious candles - correct position relati$e to momentum and immediate trend Confirmation of Swing igh 1 %y a candle ha$ing low lower than high candle' that candle has also Lower igh( Confirmation of Swing Low 1 %y a candle ha$ing high higher than the low candle' that candle has also igher Low )AS* trading is N6+ a gi$en set of rules' e(g( 2uy after ammer' Sell after Shooting Star' Sell after 2E62 ect( "t is a complete methodology of *EAD"N! + E #A*>E+ using )*"CE and -66+)*"N+S( A price re$ersal %ar&candle is 6NL7 the first indication that market sentiment #A7 %e changing( <e ha$e to confirm this with other studies( "t is N6+ a signal to make a trade( C6N-L5ENCE - -or %etter trades ensure -i% confluence' make sure hammer' SS is clearly at the top&%ottom of a mo$e - Confluence 1 8 or more le$els of S&*' #A' -i%' +L that are at he same price - 6nce we see %ar&candle setup we look for areas of confluence 1 #A' -i%' S&*' SL' S ' +L' *ound Num%ers - +he more confluence you ha$e for a trade' the higher chance of it working out

-"26NACC" - #ake sure you pull -i%s at points where there was definite and su%stantial re,ection of price . swings 1 longer the swing' more powerful the retrace/ - A;(BC - turning point& retrace - 2elow A;(BC - possi%ility of new trend - )rice re,ection %etween :9C and A;(BC -i% of pre$ious trend - retracement S&* LE0ELS - )rice mostly tests them and mo$es away @uickly .$ery rarely much price action in the $icinity of the line/ - Support is a price at which point traders expect to see %uying( Support can %e a le$el that we ha$e seen pre$ious %uying acti$ity at .perhaps the price %ounced off of it/( +he most common price for support le$el is an o%$ious spot where traders ha$e seen a ma,or re$ersal in the past - *esistance is exact same as support except' it is an area where we ha$e seen traders selling the pair in the past - "f the price is hanging around S&* le$el it is likely to %reak in the opposite direction - Determine %y looking at CL6SE of the candle and add only those where there pre$iously has %een confluence of support and resistance or lots of congestion .7ou should only %e drawing those lines which ha$e meant something in the past: <as there a lot of congestionD ow many times was price at S&* re,ectedD - Start with #onthly +- look for S&*' go to <eekly then Daily and do the same - "f S&* on a higher +- corresponds with one on the lower +- 1 greater chance it will hold - Draw S&* and Eoom out to find out: ;( ow important that le$el was to the pair 8( ow many times was it support&resistance F( <as it swing support&resistance 1 how many times G( <as it a #AH6* swing S&* 1 how many times :( <as it a consolidation price

- <eekly S&* 1 identify swings' when you identified a line scroll %ack to see how many times price reacted to it 1 if few reactions 1 low incidence line - Set charts with S&* le$els and wait for market to come into those areas - )rice Action %ars&candles define S&* le$els: +ake your )A %ar&candle Look for other )A %ars around your %ar&candle )op in lines at pre$ious )A %ars around your %ar&candle -ind stalling points from pre$ious )A %ars and their S&* !et your management process sorted in your head Allocate risk in accordance with your strategy Lock and load - +ogether with +*ENDL"NES' pre$ious support %ecomes resistance and $ice $ersa - D6 N6+ +*ADE "N+6 S5))6*+&*ES"S+ANCE - S&* often line up with *65ND N5#2E*S - "f price holds as support at a line' then we look for )A to go long or wait for retracement and support %ecomes resistance - "f price is re,ected %y a resistance line then we look for )A to go short - S&* and +L tend to switch polarity when they are %roken - 2efore we make decision to trade we need to know where S&* is relati$e to where )A is at 1 go %ack in history to where )A had %een %efore and identify those le$els that it reacted to - 6nly trade pairs at S&* le$els and not %etween them #60"N! A0E*A!ES - 89 E#A a%o$e :9 S#A expect higher prices - 89 E#A *ED' :9 S#A 2L5E' dotted *ED ;99 E#A' dotted 8:9 S#A - Daily 89 and :9 gi$e us trend direction' S&* and whether it is %earish&%ullish outlook( 89 and :9 do the same %ut from weekly point - <hat 89&:9 cross tells youD - <here are 89&:9 relati$e to priceD

- <hat does the increasing differential %etween 89&:9 tells youD - )rice %etween 89 and :9 signals indecision and lack of direction - <hen 89 is horiEontal .no slope/ price is approaching %alance .%uyers and sellers are in agreement where the price is at now/ - "f 8 #As come together are em%racing together' touching each other/ they act as S&* forewarning that %ig mo$e ahead- A 5!E *ED -LA! 1 look for )A to show the way - ELAS+"C 2AND + E6*7 1 + E D"S+ANCE + E )*"CE "S A<A7 -*6N + E 89' + E -5*+ E* "+ "S A<A7 + E #6*E L">EL7 + E 3ELAS+"C4 <"LL )5LL "+ 2AC>( - Always check: <hat is market doing when 89 #A flatD <hat the market is doing when the slope is up&downD ow steep is the slopeD <hat happens to the price when 89 acts as S&* ow price reacts around 89D <hat happens when 89 is %rokenD <hat happens to price when it crosses :9D <hat happens to price when and after it is trapped %etween 89 and :9D <hat happens to price when it is stretched away from the 89D - +here is for each pair a certain num%er of pips that price mo$es away from 89 %efore 89 pulls price %ack into line - SL6)E 1 !"0ES A *65! A))*6I"#A+"6N 6- #6#EN+5# 1 use together with +L "- )*"CE CL6SE +6 89 6* :9 1 <A"+ 5N+"L "+ CL6SES S+*6N!L7 A260E&2EL6< + E #A 2E-6*E EN+E*"N! - Study the %ar 1 where it is' why' look at )A around it

- )ins are :C of the trade' the other J:C is where they ha$e formed and why 1 pins - <here are theyD - ow long was the nose' %odyD - <hat was the se@uence of %ars&candles prior to the %ar&candleD - <hat was the siEe of the %ar&candle relati$e to the prior %arsD - 6%ser$e where the next %ar is after the candle 1 where did it open' where did it stop' what did it doD - 6%ser$e the swing after the candle' how long did it last' how many %arsD - 2ullish )"N 2A*: ;( 6&C in the top ;&F of its %ar range 8( 6&C within pre$ious %ar range F( low of the %ar protrudes %elow the pre$ious %ar .more protrusion the %etter/ G( %ar forms a swing low .after L and LL/ :( igh of the %ar within prior %ar range A( Location criteria: - swing low 1 no congestion - confluence under pin %ar 1 -i%' S&*' +L round num%ers - *ight&left eye has to %e e$ident' neatly formed - Eye has to %e around ma,or S&*' round num%er - 2e careful with huge long %ars .see what the next day %rings - usually "2 forms 1 profit taking/ - Analyse each daily %ar&candle in the context of all other %ars&candles around it' and where it is relati$e to the trend&range - 2ull %ar closing a%o$e pre$ious %ull %ars 1 uptrend - 2ear %ar closing %elow pre$ious %ear %ars - downtrend - Entry on )2: ;( Enter at close&open 8( "t is all a%out where the actual )2 closes F( "f close&open right at the first eye le$el 1 it?s a go

G( "f it has close&open %elow the first eye wait for test& formation of the second eye in relation to the ;st eye .here )2 1 hammer/ - "f you find )2 where nose protrudes through -i%' #A' S&* and open&close on the other side 1 it?s a go time - 2ar after the )2 need to retrace up to half of the tail way - Exhaustion %ars' price is lying where it wants to go' location $ery important' %reakout of range - )in %ars at the %ottom of a mo$e with the tail in the direction of the recent mo$e are not 3pin %ars4 %ut an in$erted hammer' when followed %y a %ullish %ar&candle they often indicate the %ottom of a mo$e' not a signal to go short - "f the Frd %ar cannot take out the first %ar %y ; or 8 pips then it is headed the other way : "NS"DE 2A*S - "nside %ars are pause %ars' market undecided' profit taking - <hy the %uyers&sellers are pausing: ;( Are they pausing %ecause they ha$e run out of %uyers&sellers and the next %ar will take you in the opposite direction 8( 6r they are pausing while waiting for more %uyers&sellers to continue the trend - 5sually .not ;99C/ "2 at the end of the trend 1 trend has run out of steam and is likely to re$erse .%ut how do you know you are at the end of a trend/ - "2 in the middle of a trend 1 usually a continuation %ar - "2 in a confirmed trend it is a continuation %ar&candle 1 next candle&s show where )A will go - "2 1 make the next %ar pro$e the direction you think of( )lace your entry few pips a%o$e high or low - "2 means nothing in itself - Look at e$erything around it to make decision 1 and that decision could %e to do nothing

- Se$eral "2s forming in a row 1 tug of war %etween %ulls&%ears 1 %ig %reakout possi%le and fast - <hen "2s form a pennant .se$eral "2s/ in uptrend or downtrend 1 continuation pattern - "2 1 consolidation %ar' range is shrinking - +o trade "2s we need: ;( 2ias in the direction it is going to go in 8( "mportant S&* 1 psychological le$el to protect SL on the other side of "2 - 7ou ha$e to know where you are in the trend or consolidation to trade "2s - "2s 1 trade them with the trend and only use them as re$ersals when you are sure of your le$els .-i%s' +L/ then they are usually low risk entries - "2 1 trade the %reak of the %ar&candle %efore it' - #any times #onthly +- put out "2s next to a hammer type of candles&%ars at the %ottom : - 2efore we make decision to trade we need to know where S&* is relati$e to where )A is at 1 go %ack in history to where )A had %een %efore and identify those le$els that it reacted to