Breaks false high and lows candlestick trading
During candlestick formation, the candlesticks tends to form some highs and lows.
These can be daily, monthly or yearly highs and lows.
The highs are the highest market price levels that the candlesticks formation
have ever reached within a given period of time like a day, month or year. On the other hand, the lows are the lowest market price levels
that the candlesticks formation has ever gone to within a given period of time like day, month or year.
In most case, the market prices tend to oscillate between the set highs and lows.
Therefore, most traders trade within this levels
( the traders close their orders if either the lows or highs are approached in fear of a reversal).
However, sometimes the market prices may opt to break through the highs or lows
and the trader should be very careful in such circumstances since the breaks may be false.
The trader should wait for the formation of at least two candlesticks so as to confirm the break before placing any trade.