If you want to become a master trader then you must master the art of candlestick analysis. In the last post we explained a simple Pinbar Trading Strategy that uses a simple candlestick pattern known as the Pinbar. We also gave you MQL4 code for the Pinbar Indicator that made more than 200 pips. You should download the code and start using this simple strategy. This MQL4 Pinbar Indicator is very good and only gives a signal when you have a potential strong buy or sell trade. Now we start with a discussion on how to do candlestick analysis.
How To Do Candlestick Analysis?
If you want to become a master trader you should master candlesticks! Candlestick analysis is very important. A candle can tell you what the bulls and bears are doing. If we have a strong bullish candle, it means the buyers are in control and are pushing the prices above. If we have an inverted pinbar, we know the buyers tried to push the prices high but sellers came in hard and pushed the prices down so the candle closed with a long upper wick. The first video is the recorded webinar on how to do candlestick analysis.
Now keep this in mind that candlestick signals on lower timeframes are not as reliable as compared to candlestick signals on the higher timeframes of 4 hour and the daily chart. 4 hour candle encompasses 4 one hour candles so what it tells you is much more reliable than what a single one hour candle is telling you. You should also watch this 1 hour recorded webinar on how to become a naked trader. Naked trading means trading solely based on price action. Candlestick analysis is an important tool when it comes to naked trading.
It is a good idea to look at the 2 hour candlestick and 8 hour candlesticks as well when making your trading decisions. Now you will ask how to look at the 2 hour and the 8 hour candlesticks as these are not available on MT4. One approach is to code a custom indicator that makes these 2 hour and 8 hour candlesticks. Our approach is very simple. Suppose the daily candle on your MT4 starts at 2 AM in the morning. This means that the first 4 hour candle will be formed at 6 AM and the first 8 hour candle will be formed at 10 AM. Just open your daily chart at 10 AM and you can see 8 hour candle formed. That’s as simple as that. In the same manner, the 4 hour candle closes at 6 AM. If you want to see the 2 hour candle, just look at the new 4 hour candle at 8 AM. This is how things can be made simple if you use a little bit of common sense.
This simple trick can keep your charts free from clutter. If you want to become a good trader, just keep your charts simple. Don’t clutter your charts with too many indicators and moving averages. Naked trading is the art of trading without using any indicators. After reading this post you will have a very strong foundation on how to trade forex price action naked.
How To Draw Support And Resistance Levels?
Support/Resistance levels are very important. You should understand and master this concept. You just need to draw Support/Resistance levels and use candlestick analysis to determine what the market is doing. This is as simple as that. There are now many indicators available that draw S/R levels. Avoid using these custom indicators and learn how to draw these S/R levels yourself. These S/R levels are really very simple to draw. Watch the video below that explains how to draw these Support and Resistance levels.
How To Predict Market Reversals?
Now after watching the above 2 webinars you have learned how to do candlestick analysis and how to draw the support and resistance levels. When you combine these 2 tools you can easily predict the market reversals. Watch the video below that explains how you can trade the reversals.
Reversal trading can be very profitable. But first you need to understand and master how to predict market reversals. Watch the above video in detail and you will realize how easy it is to predict market reversals. Now as your level of skill increases you will be able to just look at the price action and know what the market will do whether it will go up or down and at what levels you can expect a reversal. So you can select your stop loss and profit target and that’s it for the rest of the day.
You should also read our post in which we explain our double in a day strategy that you can use to double your account in just 1 day. This Double In A Day Strategy also uses candlestick analysis and the concept of S/R. The high and low of the 4 hour candle is an important intraday S/R level. Read the post and understand the concept of doubling your account in just one day while keeping the risk below 2%. So keep your trading simple. Become a naked trader. Forget indicators. Indicators are all based on price action and are lagging in nature.Learn how to look at forex price action and make your trading decisions. Price action is the only indicator that you need.