Monday's candle (04062020) was a Doji. A Doji is an indecision candle. In this condition, I now need to wait to see it the market will close above the high of the Doji to inform me the market is going higher or close below the low of the market to tell me the market is moving lower. According to Steve Nison, the Japanese say the market is now at a delicate turning period and could go either way.
So how do we make trade decisions based upon this candle?
Looking at the last two candles I see a bullish candle followed by an indecision candle. At this point, it would be wise to have taken profit on half my position and to have moved my stop loss down to my entry price level. This trading decision guarantees me a profit on this trade no matter what the market does from here. I still have one-half my position open so if this market decides to turn back down I will be able to add to my profit, however, if the market continues higher and stops me out I will have broken even on my open half position.
Note: Bringing my Stop Loss to breakeven removes the risk of this trade this now leaves me free to add on an additional position with a different currency pair while keeping my current position open.
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So how do we make trade decisions based upon this candle?
Looking at the last two candles I see a bullish candle followed by an indecision candle. At this point, it would be wise to have taken profit on half my position and to have moved my stop loss down to my entry price level. This trading decision guarantees me a profit on this trade no matter what the market does from here. I still have one-half my position open so if this market decides to turn back down I will be able to add to my profit, however, if the market continues higher and stops me out I will have broken even on my open half position.
Note: Bringing my Stop Loss to breakeven removes the risk of this trade this now leaves me free to add on an additional position with a different currency pair while keeping my current position open.
PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial.
Have an analysis Question? Feel free to send my a private message I enjoy sharing!
