Ceiling test candlestick trading 

Ceiling test candlestick trading

Ceiling test is a veyy familiar term in forex trading especially for those traders

who use support and resistance levels to trade.

Just as in a house, the ceiling in forex trading is the top most level of a given range.

In the case the support and resistance levels, the ceiling is the region around the resistance level.

Ceiling test therefore means that the market prices are testing the resistance level.

The market prices tend to oscillate within a short range around the resistance level with the resistance level being at the middle.

When a ceiling test occurs, some traders opt to place a sell order with a stop loss level being

just above the resistance level in case the market breaks through the resistance level and moves up.

If there is more than two complete candlesticks formed above the resistance level,

the trader should consider closing his or her sell order since there is a very high possibility of the market prices breaking up.


Support and resistance candlestick trading