Tight channel and spike and channel bull or bear
When drawing channels on your forex chart, sometimes it is expedient to draw tight channels due of small candlesticks.
The channel width is mainly determined by the length of the candlesticks under consideration.
It is usually not advisable to trade during tight channels.
A channel can be described as a bull or a bear depending on the direction of the channel.
If the channel points downwards, then it is referred to as a bear channel and if it points upwards, it is referred to as a bull channel.
Also, during forex trading, it is common to come across some spikes once in a while.
A spike is a somewhat
large movement of the market prices either downwards or upwards.
In most cases, such movements are caused by
unexpected events like the news.
Spikes are the main reason as to why you should never trade without a stop loss and a take profit.
Trend resumption day candlestick trading
It’s a common norm among day candlestick traders to trade trend corrections.
However, it is always important to get to know when the trend correction is over and when the trend resumption takes place.
There are various signs that show when the trend resumption is just about to take place.
Some of these signals are: breaking of corrective highs during an uptrend or corrective lows during a downtrend,
breaking of corrective price channel and breaking of the RSI back towards the direction of the previous trend.
A price break (breaking of a price) simply means that a new price level is reached in respect with the previous trend.
For example, the EURUSD currency pair may have previously been in an uptrend and attained a level of 1.18890.
Then a correction occurs and up to a low of 1.15678 and the price starts to rise again and a price of let’s say
1.19000 is reached at the close of a certain candlestick.
This result in a price break since the previous level of 1.18890 of the previous uptrend has been surpassed.
Trending trading range days candlestick trading
For you to find a price range, you will have to incorporate support and resistance levels.
And since it may sometimes be hard to identify the support and resistance levels, it is advisable to get
the support and resistance indicator, which will identify the support and resistance levels for you and indicate them as lines.
With the support and resistance levels identified, the ranges can now be easily identified.
A range is the price movement that takes place within the support and resistance levels; either from the support to the resistance level or vice versa.
During trending trading range days, the trader should first identify the trend and then trade the ranges that are in the same direction of the ranges.
Stairs broad channel trend candlestick trading
The stairs broad channel refers to a broad channel that has some kind of stairs within it.
The channel may for example be a bull channel.
Then, within this bull channel, you may have some bear trends, but which doesn’t touch the lower line of the channel.
So the bear trends move up to somewhere in the middle of the channel width before resuming to the previous uptrend and a new high is
attained before the cycle repeats itself.
The stairs channel trend candlestick trading may be very beneficial to scalpers.
The scalper simply takes advantage of the stairs (swings) within the broad channel.
But the trader should be very cautious to notice the stairs which break the channel line towards
the opposite direction of the current trend since this may indicate a change of the trend.
First pullback sequence bar minor trendlines candlestick trading
Trendlines are very common tools among the forex traders.
However, the strategy behind drawing the trendlines differ from trader to trader sine the criteria used to draw the trendlines differ.
Among the very many trendline candlestick trading strategies that exist, the first pullback sequence bar minor
trendlines candlestick trading is practiced by many traders.
This strategy entails drawing minor trend lines for the first pullback candlesticks.
For example, if you have a bull trend and a pullback (first candle of the retracement) is formed, then the trader,
draws a minor trendline using the open and close prices of this first pullback candlestick.
These minor trendlines help to show the onset of retracements which is very beneficial to intraday traders.