Reversal Bullish:
Following generally three successive price swings down, the price may test the newly formed bottom several times, by making mini candlesticks on the area instead of going up.
If the price will reverse bullish, increased buying pressure will occur, signaling the setup of the trade with a medium-sized green candlestick.
Reversal Bearish:
Similarly, after three successive swings up, the price may test the top several times, by making mini candlesticks in a narrower range.
If the price will reverse bearish, increased selling pressure will occur, signaling the setup of the trade with a medium-sized red candlestick.
For these kind of price setups, do not wait for the price to go down several times. Setup your trade with Fibonacci and candlestick patterns.
Note:
Broken range: If the range is broken on mini candlesticks, without reversing the trend, then the patterns indicate no price reversal.
Wait for a bearish or bullish range closing candle to setup the trade.
Profit Targets:
Use the Fibonacci retracement tool to identify three successive profit levels. Begin at the Higher Low and trace it to the Higher High, and set Fibonacci Profit Target #1, #2, and #3.
Stop Loss:
Set stop-loss at three pips above range-closing price reversal candle - just above or below the top of the wick - to greatly reduce losses.
Always make sure you are risking at least 2:1.
Following generally three successive price swings down, the price may test the newly formed bottom several times, by making mini candlesticks on the area instead of going up.
If the price will reverse bullish, increased buying pressure will occur, signaling the setup of the trade with a medium-sized green candlestick.
Reversal Bearish:
Similarly, after three successive swings up, the price may test the top several times, by making mini candlesticks in a narrower range.
If the price will reverse bearish, increased selling pressure will occur, signaling the setup of the trade with a medium-sized red candlestick.
For these kind of price setups, do not wait for the price to go down several times. Setup your trade with Fibonacci and candlestick patterns.
Note:
Broken range: If the range is broken on mini candlesticks, without reversing the trend, then the patterns indicate no price reversal.
Wait for a bearish or bullish range closing candle to setup the trade.
Profit Targets:
Use the Fibonacci retracement tool to identify three successive profit levels. Begin at the Higher Low and trace it to the Higher High, and set Fibonacci Profit Target #1, #2, and #3.
Stop Loss:
Set stop-loss at three pips above range-closing price reversal candle - just above or below the top of the wick - to greatly reduce losses.
Always make sure you are risking at least 2:1.
