To become a lucrative forex fx trader you need only a couple things. A solid as well as established forex day trading system, and the trading dicipline to not waiver from it! Inside this forex trading article we will discuss the use of forex reversal candle patterns. A strategy that has established it works consistantly for years, but ONLY if traded properly, furthermore ONLY when traded with dicipline! Additionally we will discuss what candle patterns are most successful and equally important at what time to trade them.
Initially we will discuss what candle formations generate the greatest fx trading setups. If you do not understand traditional candle patterns then I suggest doing a bit of examination to comprehend the vocabulary better, because this is geared in the direction of the intermediate fx trader with atleast a beginning knowledge of basic candle patterns. The best, and most time weathered candle patterns are the shooting star in addition to the hammer reversal candles. These 2 candle patterns produce some of the most consistant reversals as well as trend continuation setups of all the candle patterns
I have always believed that every candle tells a story after that it’s up to you the fx day trader to be proficient enough to understand that story and trade with it successfully. Hammer and shooting star reversal candle patterns offer you the most knowledge in my opinion. They show unmistakably that the market tested a low or high and got rejected which is our initial precursor that the fx market is going to potentially reverse. Always make certain that these reversal patterns are on a previously proven region of support or resistance. Simply taking a fx trade on a hammer or shooting star candle formation that didn’t touch a zone of S/R decreases the likelihood of a successful trade dramatically!
Some additonal points to make your reversal candle formation system more strong, is initially taking reversal candles only in the direction of the overall larger trend. For example if the market is trending up and then short term moves downward. Entering a buy at the bottom of that retracement, at an region of proven support, and once a hammer candle pattern closes, offers a trader the greatest odds of a good continuation day trade. This method is discussed throughly in a fx education video called Day Trading Forex – Intra Day Candle Formations which I highly suggest you watch.
Additionally, similar to any other fx day trading methods be sure you only take fx trades during volitile periods of the day. In the Live Forex Trading Room we only take trades around the London and Eurpoean open and the initial 3 hours of the NY open. Placing forex trades outside of the most active periods of the trading day repeatedly causes numerous fakeouts and insufficient momentum following a reversal candle formation. I trust the suggestions in this article as well as the fx strategy training video above, aid you in your own trading and benifit you for years of fx trading to come!