Let me tell you how you can use candlesticks
to precisely calculate
support and resistance. This piece of information can help you
make decision about if you should enter/exit any trade.
As you must be aware, when currency pair approaches any prominent
support or resistance level, its natural tendency is to reverse.
But on a significant occaisions the price tries to break that level
and contiue the trend.
So, the imp[ortant question in every trader’s mind is how would
they know if the market is reversing or continuing with the trend.
The answer is “By monitoring candlestick formations”
If the price approaches the support/ resistance, watch out what
kind of candlesticks are being created at that level.
So, in a bullish trend when currency pair approaches a resistance,
a strong bearish candle (one with large body and small wicks)
would represent a reversing market.
So, natyrally, this is a good time to close your open trades or
adjust your stop losses.
However, a doji or a spinning top candlestick would mean some
level of indecision since such candles represent that buyers
and sellers have almost equal strength. So going forward market
can move either way.
In such case, it is best to watch the next 2-3 candles and then
take any decision.
**Let me tell you, there is no such EA that can do that for you.
Thats why most of the EAs out there don’t work.
Now, I know there may be quite a few terms I mentioned above
which may not be very clear as to what do they mean.
Artical By
Rahul
