Why I Trade Using Candle Patterns
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#459: Why I Trade Using Candle Patterns
In this video:
00:26 – Why I use candle patterns
01:01 – Brokers offer you multiple indicators
01:41 – I deleted everything and started again
03:13 – Not all candles are equal
04:08 – Candles show you what’s happening in the market
05:05 – Blueberry Markets as a good broker option
I’m going to explain why I trade using candle patterns. Let’s talk about that and more, right now.
Hey, traders. This is Andrew Mitchem here at the Forex Trading Coach with the video and podcast number 459.
Why I use candle patterns
This video is really important because it explains why I use candle patterns and why I believe you probably should do too, and how it will massively help you with your trading.
You see, there are different ways of trading. You can be a fundamental trader, where you’re predominantly looking at news events, political events, those type of things, or a technical trader. I’m a technical trader. But even when you become a technical trader, there are still so many different ways of trading. And most people unfortunately get caught up in the hype and the glitz and the glamour of too many indicators.
Why I use candle patterns
You see, the Forex brokers are very, very good at offering you just an enormous basket of indicators. And everybody makes the same mistake when they start trading, as they think they are going to find this magical formulation of indicators that no one else has found. There’s a magical combination, the right settings, that just no one else in the history of trading’s ever discovered before. And this is what’s going to make it work for you and why you should have lines all over your charts.
Look, I fell for it years and years ago as well. And it’s something that pretty much everybody who decides to be a technical trader will do so at some stage in their trading journey. So it brings me back to candles.
I deleted everything and started again
The reason that I became profitable is I got rid of all that mess on my charts, all those lines and arrows and stars and all those different things. You know what I mean if you’ve been trading with any form of indicators in the past. And I got back to candles. Why? Well candles tell me what’s happening in the market. They tell me where the price has reached to as a high, where it’s been as a low. So therefore natural support and resistance levels. It tells me there’s momentum. Is it moving upwards? Is it moving down? Is it indecisive? It tells me, when I look at what part of the chart the candle is in, whether there’s room to move. Do I have the ability to get to my profit target before hitting resistance levels as buy trades?
And also the thing that so many people fail to do is they fail to look at the actual price. Now we’re trading Forex pairs, or you might be trading commodities or cryptos, whatever it might be. If you don’t look at the price on the right hand side of the chart, then all you’re doing is basically following lots of squiggly lines on your charts if you’re a technical trader, with too many indicators. You have to look at the right hand axis of your chart and look at the price. Why did that candle get up to that level? Oh, it’s because it was a round number. Oh, look, it happened several candles ago, or several days ago, or weeks ago, it hit that level and it reversed. And so all those type of things are really important for you to consider when you’re trading with candles.
Not all candles are equal
Now, another great thing with candles is, like I’ve said, they can show you indecision. They’re not all equal. They’re not all saying you have to buy here or sell there. You could be in an up trend and all of a sudden there’s an indecision candle. And that then gives me two messages. One, if I’m already in a buy trade, look that buy trade may be coming to an end and it may not get to my profit target. And it may now be a really good idea to start managing this trade, maybe closing part of it out. There’s reasons why it may not continue up to my anticipated level. If I’m not in a trade and I’m seeing a big up trend, and then I see indecision that’s going, hey, there’s an opportunity here that if we get another candle that’s indecisive and then bearish, we could then be seeing this tip over. And therefore that becomes our selling opportunity. So that’s how you use the candles.
Candles show you what’s happening in the market
Also, they make life very, very easy for you to be easy to identify in a picture form, what’s happening in the market. Are there more buyers? Are there more sellers? And also it’s easy to then gain strength and weakness because you could go through all, say of your Euro pairs and go, well, they’re all heading up. So therefore the Euro is probably the dominant strength in this. And so you can use strength and weakness really easily as well.
And also, don’t forget we only look at making our analysis on a candle once that candle has closed. That again makes your life easy because you know when to look at your charts.
Now, talking of charts, on MT4 and MT5, we have custom built indicators and candle identifier software, along with support and resistance levels and pivot points, et cetera, that help myself and all of our clients to analyse the market in a far easier format.
Blueberry Markets as a good broker option
Now, if you’re looking for a good MT4 or MT5 broker, have a look at Blueberry Markets. They’re over in Australia. They can take clients from pretty much most countries around the world, apart from maybe the US and a few other countries. But for the vast majority of you listening to this or watching this, and if you are looking for a good MT4, MT5 broker, I highly recommend you consider Blueberry Markets. I’ll put a link to them on this post and you can go and check them out for yourself.
So I hope that helps with the candle patterns. Very, very important that you use candles and use them correctly. They will massively help your trading. I know they will. They completely changed mine around all those years ago. And I hope that helps. This is Andrew here at the Forex Trading Coach. I’ll see you this time next week. Bye for now.
Episode Title: #459: Why I Trade Using Candle Patterns