The more I study into candle stick patterns ,the more I find it fascinating and how powerfully accurate it can be. The hard truth is hard to bear sometimes as it confounded times and times again how awfully wrong I was in my analysis.
But if I remain humble and learn from it, it can serve as a great teacher. And that is the kind of attitude that I think all trader should adopt. We may falter from times to times but we also get up stronger each time, able to withstand the next fall better and more importantly, we progress and learnt something useful from that experience.
I have heard so many sad stories of how people get burnt from their greed and lack of knowledge or blindly following another guru in the marketplace to buy or sell a particular financial product. To be fair, the guru might know well what he's doing but he cannot be responsible for your downfall, if any.
The best way to learn from your mistakes is to admit them rather than to blame them on someone else - Anoymonous. There are thousands of authors here in TV and each of us are trying our level best to share our knowledge and skills. Some may be more persuasive than others in their analysis but to put it bluntly, you are not held at knifepoint to place the trade.
You gotta come to your own decision and once decided, whatever the consequences, you have to own it yourself 100%. It took me some time to let that go in the past before I wake up and realised the simple fact of moving on and taking things to my own hands.
Enough said, let's return to EURUSD.
From the resistance level, you can see there are multiple price levels that the price failed to break above 1.109. This is the first sign.
First red arrow - the 2nd red arrow was a bearish engulfing candle, confirming the first one that touches the resistance level that it is going to turn down.
2nd red arrow - here is a bit tricky but carefully studying the candles would reveal that buyers are exhausted and lack strength to push higher. This was confirmed by the 3rd red arrow.
4th red arrow - this was nice as it shows the strength of sellers returning at the end of the day pushing the price down hard.
Green rectangle - here is the fake breakout area.
04/12/19 a bullish green candle breakout but since we do not buy on breakout, we wait for the next candle and it was bearish one and closed below the resistance level. So we do not buy.
05/12/19 another green candle and it closed slightly above the resistance level, giving hope to the buyers once more. At 1800 hours , a doji candle pattern emerge, showing signs of bulls and bears fighting, an indecision, so we wait some more.
At 2200 hours when the US market opens, a nice bullish candle appears, making the early bulls who jump in earlier hope and profits that they were right.
06/12/19 from 0200 to 1000 hours, you can see that while price did move up slightly, the candles are getting shorter and shorter, a sign of trend reversal. This was confirmed at 1400 hours when a bearish engulfing candle happens and where one can sell down.
The confirmation shot was made on 1800 when the candle pierce down the resistance level and never see the day light again.
Using Trend line as a complementary tool, you can also see clearly that it has broken down from the bullish line (green dotted), giving you assurance that your strategy is right.
In conclusion, you might have taken a buy at 1.10922 and made a small loss or breakeven depending on your SL. But more importantly, if you stay away from this pair and moves to other because of this mistake , then you had missed a great opportunity to make some good profits from the sell down.
The price is still heading south as I am typing this, haha. Now, I hope this step by step analysis gives you the confidence to use candle stick patterns and trend line together to back up your analysis.
But if I remain humble and learn from it, it can serve as a great teacher. And that is the kind of attitude that I think all trader should adopt. We may falter from times to times but we also get up stronger each time, able to withstand the next fall better and more importantly, we progress and learnt something useful from that experience.
I have heard so many sad stories of how people get burnt from their greed and lack of knowledge or blindly following another guru in the marketplace to buy or sell a particular financial product. To be fair, the guru might know well what he's doing but he cannot be responsible for your downfall, if any.
The best way to learn from your mistakes is to admit them rather than to blame them on someone else - Anoymonous. There are thousands of authors here in TV and each of us are trying our level best to share our knowledge and skills. Some may be more persuasive than others in their analysis but to put it bluntly, you are not held at knifepoint to place the trade.
You gotta come to your own decision and once decided, whatever the consequences, you have to own it yourself 100%. It took me some time to let that go in the past before I wake up and realised the simple fact of moving on and taking things to my own hands.
Enough said, let's return to EURUSD.
From the resistance level, you can see there are multiple price levels that the price failed to break above 1.109. This is the first sign.
First red arrow - the 2nd red arrow was a bearish engulfing candle, confirming the first one that touches the resistance level that it is going to turn down.
2nd red arrow - here is a bit tricky but carefully studying the candles would reveal that buyers are exhausted and lack strength to push higher. This was confirmed by the 3rd red arrow.
4th red arrow - this was nice as it shows the strength of sellers returning at the end of the day pushing the price down hard.
Green rectangle - here is the fake breakout area.
04/12/19 a bullish green candle breakout but since we do not buy on breakout, we wait for the next candle and it was bearish one and closed below the resistance level. So we do not buy.
05/12/19 another green candle and it closed slightly above the resistance level, giving hope to the buyers once more. At 1800 hours , a doji candle pattern emerge, showing signs of bulls and bears fighting, an indecision, so we wait some more.
At 2200 hours when the US market opens, a nice bullish candle appears, making the early bulls who jump in earlier hope and profits that they were right.
06/12/19 from 0200 to 1000 hours, you can see that while price did move up slightly, the candles are getting shorter and shorter, a sign of trend reversal. This was confirmed at 1400 hours when a bearish engulfing candle happens and where one can sell down.
The confirmation shot was made on 1800 when the candle pierce down the resistance level and never see the day light again.
Using Trend line as a complementary tool, you can also see clearly that it has broken down from the bullish line (green dotted), giving you assurance that your strategy is right.
In conclusion, you might have taken a buy at 1.10922 and made a small loss or breakeven depending on your SL. But more importantly, if you stay away from this pair and moves to other because of this mistake , then you had missed a great opportunity to make some good profits from the sell down.
The price is still heading south as I am typing this, haha. Now, I hope this step by step analysis gives you the confidence to use candle stick patterns and trend line together to back up your analysis.
Comment:
argh, we are stopped out
I have find scalping by the minutes though exciting clouds my thinking and rush me into making decisions that I would not made had I taken a longer time frame into consideration.
To each his own, nothing right or wrong about the time frame you used so long you are comfortable.