My Favourite Candle Patterns to Trade
#483: My Favourite Candle Patterns to Trade
In this video:
00:37 – Trading the patterns
01:10 – Make your trading enjoyable
01:48 – The candle patterns we look for
02:18 – My favourite candle pattern
03:04 – Different time frame chart trades this week
05:05 – Trade the pattern
As a trader, it’s important that you learn to trade the pattern and do not make your trading too complicated. If you can do that, your results will be good. Let’s talk about that and more right now.
Hey, traders. Andrew Mitchem here at The Forest Trading Coach with video and podcast number 483.
Outside again today. Get some nice comments and feedback from people, just enjoying the outdoor environment here in Nelson, in New Zealand, and of course summertime here so nice to get outside.
Trading the patterns
Trading the pattern, it’s a really important part of trading and it can declutter your mind. It can make your trading far more enjoyable, far easier and definitely more profitable. Now what I mean by that is in so many things like compliance, red tape, overcomplicating things just in life in general, government policies, whatever it is that things are just in many ways just overcomplicated and trading is no different.
Make your trading enjoyable
And in order to make your trading enjoyable, I strongly believe that you’ve got to declutter your mind and make things a lot more simple.
And for me, it’s about trading the pattern. I do that regardless of the timeframe chart that I’m trading. So a lot of people come to me and go, “Hey, Andrew. What’s the best timeframe chart to trade? Should I only be trading daily charts? Should I only be trading hourly charts?” And to me, you trade the setup that’s on the chart at the time. And if it’s a good setup, you take the trade. If it’s not, you don’t take the trade.
The candle patterns we look for
So when I’m looking at a trade, I’m looking for a candle shape, candle pattern to form first to give me the confirmation that we could be seeing either a reversal pattern or a continuation pattern. So I trade those two patterns to start with. I trade reversals because if we’ve been in a big up trend, let’s say, we’re then seeing a bearish candle and we’re then turning around, looking for a down trend opposite with a buy trade then, looking for a down trend and it to turn around to go up.
My favourite candle pattern
My favourite pattern though is a continuation pattern, and that’s when we’ve had, let’s say, a big up trend. We’ve had a pullback and then we see a bullish pattern to go long again. So candle pattern is always number one to me. I like to see previous indecision or bounce at a certain level, a round number if it’s a buy trade bounce off a support level. I like to see room to move for the profit target. I love to see a round number to help protect my stop loss, things like that. If I’m taking a buy trade, I don’t really want to see my profit target above the last, say, swing high. I don’t need to have to make new ground, new high price to get to my profit target. That again just detracts from the likelihood of my profit target being hit. So all those things come into it.
Different time frame chart trades this week
But then it comes to the timeframe chart that you’re trading, and I want to give you three examples of trades this week. This is eight trades in total that I’ve taken this week. Seven have been profitable. Now, on our forum site on Tuesday at the 5 AM Eastern Standard Time changeover, on the 12-hour charts, I posted four trades; the New Zealand-US and Aussie-US, a US-yen and a franc-yen on the 12-hour chart trade. It took 10 minutes to scan through the charts at that time, and the 12-hour charts happened to be showing the right pattern. So again, I didn’t know at the time, was it going to be the four-hour charts, the six-hour charts, the 12-hour charts that were showing the pattern?
And when we went through the charts, there were those four charts on the 12 hours that were all showing high-quality setups. So guess what we did? We took them, and guess what happened? They worked and they were all profitable. And I can share those trades with you.
Also, on Tuesday actually, I was out in town, came back home and I saw someone posted a four-hour chart trade on our forum site, and it was a euro-New Zealand trade. On the four-hour charts, again, they traded the pattern. I saw the trade, took the trade, and it was a great profitable trade. And on Wednesday, we took four trades on the daily charts, and we had an aluminium trade or aluminium if you’re in the US, and that stopped that. And then we had the US-franc, US-Norwegian krone and the franc-Singapore dollar. A little bit of an unusual couple of pairs there, but they were again, showing the pattern. Guess what we did? We took the trades.
Guess what we did also? We posted those trades on our membership site with exact entry and exits for our traders to follow with the reasons why we’re taking the trade and it was to do with the pattern. And guess what happened? Those three forex pairs all hit their profit target. So again, it’s the pattern.
Trade the pattern
Trade the pattern regardless of the timeframe chart, almost regardless of the pair. If the pair that you see on your chart on the close of a candle is showing the pattern that you’re looking for, then take the trade. It will work.
So I hope that helps. Keep your life simple. Keep your trading simple. It’s far more enjoyable. You’ll do well from it. Any other trading topics that you’d like me to cover on future videos and podcasts just like this, just send me an email, [email protected]. Happy trading, everybody. See you soon.