Reading the Daily Candlesticks Signals Every Day
If you like to have a trade setup every day, then you need to master the candlestick signals and patterns. After that you can check the daily charts when the daily candlestick is closed and the new daily candlestick is opened. You can do it for over 20 currency pairs, gold, silver and the stocks that you like to trade.
Doing so, you can usually find a trade setup almost every day. I said “usually”, because sometimes the markets become too slow and the candlestick signals they form become too weak, so that you will have to stay away for a while. But when the markets are volatile enough, you can usually find a candlestick signal that shows you the market’s direction for the next one or two days and sometimes more.
Some traders use such a technique and trading strategy to trade. They check the daily candlesticks and find the signals that show the the markets’ direction for the next couple of days. That is enough to take a position and make some money: I Trade the Daily Chart, but I Am a Day Trader
Three days ago, I shared a trade setup that was reported at LuckScout Millionaires Club. It was a short trade setup that was formed by 2017.04.06 daily candlestick on AUD/CAD daily chart. I recommend you to read that report first, if you haven’t read it before, because it teaches you a lot of things about the candlesticks signals and the information that each of them can give you: The Anatomy of a Good Bearish Engulfing Candlestick Pattern
Today, I am going to share another candlestick signal that formed on NZD/CAD by 2017.04.10 daily candlestick. This trade setup was also shared with the LuckScout Millionaires Club members.
Now that you have read about the AUD/CAD short trade setup (here), you can easily understand why 2017.04.10 daily candlestick has formed a short trade setup, because these two setups are so similar to each other.
On the below chart, the red arrow at the right is pointed to 2017.04.10 daily candlestick which has formed the short trade setup I am talking about. As you see, this candlestick is formed on a bear market and after a bearish candlestick that has a strong bearish body. Above all, it has broken below the 0.92765 support level which is a small level formed by the low price of 2017.03.31 candlestick.
There is no doubt that this trade setup is not strong. But it is suitable for those who want to predict the direction of the price for the next one or two days. Why?
First, because it is formed on a bear market. Second, it is formed by a candlestick (2017.04.10) that has a long upper shadow (which means bears are holding the control), and has broken below a support level that was formed few days ago. It means bears have been strong enough to take the price down and close it below the level that they couldn’t break below, few days ago. It means now they are stronger than few days ago, and so, they should be able to take the price even lower at least for the next one or two candlesticks:
And this is the result of this trade setup (below)… The price went down for over 100 pips and for two candlesticks. Although the price turned around and formed a strong long trade setup later which is another trade setup to go long this time, that 100+ pips down movement is enough for the daily candlestick followers to take a short position and make some money.
You could go short after the 2017.04.10 daily candlestick close. Your stop loss had to be around the high price of this candlestick that became almost a 40 pips stop loss. Your target can be the same or twice of the stop loss size. You can split your 2% risk into two positions. I mean you could take two 1% positions. Then, you can close one of them at 1:1 which is where the price moves accordingly for 40 pips that equals your stop loss size. You can close the second position at 1:2 which is where the price has moved down twice of your stop loss size. Of course, after closing the first position, you’d better to move the stop loss of the second position to breakeven.
Am I recommending you to follow the above trading style?
I don’t personally trade like this. But it is the trading style that many traders who trade through the retail brokers’ platforms, follow. Those who don’t like to wait for several days or weeks for the strong trade setups to forms, can follow this style. However, you should not expect to make more profit through this trading style, because as you see that movements are not that strong most of the time. Taking more positions doesn’t necessarily mean more profit. Sometimes it even results in more losses.
In spite of this, this style is a good practice to learn and master the candlestick signals and patterns.