Strong trend bars in the first hour often predict strength candlesticks
When the bars formed in the first hour are strong then the strength of the candlesticks formed are termed to be strong.
However, for you to be able to use this theory, you will have to use a chart that is lower than the 1 hour chart.
This means that you will have to use the 5 minute, 15 minutes or thirty minute chart.
If the bars within the first hour are strong, that is the bars that form either in the 5 minute,
15 minutes and the 30 minutes chart have formed a clear strong trend (down trend or uptrend),
then the trend is strong and you can be confident enough to place a trade.
Opening the patterns and the reversals candlesticks
There are those candlesticks that open the patterns as well as those that open the reversals.
The two are equally important and can be of very great help if the trader can only recognize it.
However, these two candlesticks are very hard to recognize are require very great care for the trader to take note of them.
Now let’s get to knowing how to recognize the opening of the pattern and reversals candlesticks.
These two are easily detected if the trader is using a trading strategy which incorporates some indicators.
The indicators will give a signal mostly at the onset of a pattern which will coincide with the candlesticks opening
the patterns or the reversals.
Later in the day in the same direction candlesticks
For an intraday trader, every market reaction within the day is of great significance.
So, the trader should follow the market prices from the start of the day to the close of the day.
Mostly, the trend may be too strong in the beginning or the start of the day,
but the trader should keep tracking the market prices so as to know how the trend changes later in the day.
Especially if you placed a trade in the morning, you will have to look at the market later
in the day so as to determine whether the trend is in the same direction so as to determine whether to close
the trade or leave it running.
Third bar of the day and the 15 minutes close candlesticks
The third bar of the day and the 15 minutes close candlestick is experienced
only by traders who use the 5 minutes chart at frequently take a look at the 15 minutes chart.
It is simple mathematics that five three times will give a product of fifteen.
Therefore, if three bars closes in the 5 minute time frame chart, and the trader open a 15 minute chart,
he or she will see one candlestick or bar that have closed.
Therefore, when using the 5 minutes chart the close of the third bar will be the close of the first bar in the 15 minute chart.
The third bar of the day and the 15 minutes close candlestick is best for confirming the trend of the market.
If the third bar of the day shows the same trend as the 15 minutes close candlestick,
then the trader can be confident that the trend is confirmed.
Trend from the open or trend from the first bar candlesticks
It is always a very crucial thing in forex when it comes to getting the trend right. If you mess up when detecting the trend,
it will affect the outcome of all the trades that you place. For example, if you determined the trend as an uptrend and you placed a buy order
and the trend was actually a downtrend, then you are in for a shock.
The trader can get to know the trend from looking at the formation of the candlesticks.
In most cases, the trend is obtained from the analysis of several closed candlesticks over a range of time.
However, it is also possible for the trader to get the trend from the open or the first bar.
But this is not always a good thing to do since the open or the first bar may be the last candlestick of the current trend.
Also, first candlestick may form till midway and then reverse forming candlesticks like the doji or the hammer.