The candlestick trading bible
THE CANDLESTICK TRADING BIBLE
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- 2-The level
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THE CANDLESTICK TRADING BIBLE at your chart, and try to apply the concept of higher highs and higher lows and vice versa. When you are analyzing your charts, bear in mind that the markets move in trends, and trading with the trend is the most important element in your technical analysis, there’s no more important than the trend, don’t never try to fight it, or to control it, otherwise you will pay expensively for trying. You can’t make money under any market conditions no matter how powerful is you’re trading system, you have to be patient enough, and let the market tell you which direction is going to take. Successful traders say, the trend is your friend, and if you want to master trading the engulfing bar pattern, your first rule is to follow the market direction, in other words, the trend should be your best friend. 2-The level: When you find a clearly definable uptrend or downtrend, the next step is to identify the most important levels in the market. i mean the most powerful support and resistance. If prices test a support level and stop, this is an indication that buyers are there, this area is watched by all participants in the market, because it represents a great buying opportunity. Conversely, if prices test a resistance level and stop in an uptrend, this is a clear signal that selling strength is in the market. The example below shows how the market participants interact with support and resistance levels: 114 THE CANDLESTICK TRADING BIBLE These levels take different forms such as: trend lines, channels, flags, triangles… and your ability to identify them in your chart will help you find better price levels in the market. In trending markets, when prices pass through resistance level, that resistance could become support; see the illustration below to understand how to trade the engulfing bar pattern with support and resistance in a bullish or a bearish trend: |
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