Candlestick price action at key levels
6 lessons
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- 4.1 Anatomy of a candle ✓ Completed
Every candle records four prices. The body shows where price opened and closed, the wicks show how far buyers and sellers pushed before they were pushed back.
- 4.2 Pin bars ✓ Completed
A pin bar is a candle with one long wick and a small body, a record of price being rejected. It only matters where the rejection happens, at a support or resistance level.
- 4.3 Engulfing candles ✓ Completed
An engulfing candle's body swallows the body before it, a sign that one side took over. At a support or resistance level it can mark a turn; in the wrong place it means very little.
- 4.4 Inside bars ✓ Completed
An inside bar fits entirely within the candle before it, the mother bar. It shows the market pausing. The trigger is price leaving the mother bar's range, and at a level you take only the side the level agrees with.
- 4.5 Location beats pattern ✓ Completed
A candle pattern alone is not a reason to trade. A setup needs three things together, the pattern, a support or resistance level, and the trend, plus an entry, stop and target decided before you trade.
- 4.6 When it fails ✓ Completed
Candle patterns lose too. Three real losing trades on EURUSD show the usual ways it goes wrong, a pattern against the trend, a pattern on a very low timeframe, and a news candle mistaken for a pattern.