Price Action Basics l How to trade reversals

Update chart of gbp/chf

I posted a chart Earlier in the in which I mentioned "How to trade reversals" and the good part was that I post a chart with recent activity and that chart was gbp/chf, and In now time price action witness a healthy sell-off from 1.5280 to 1.5200 and that was on the cards

Lets Explain further that what happened with the price the such quick fall in price action.

Moreover, It is natural behavior because when earlier attempt to reach the highs has failed after double bottom and price try to repeat with liquidity candles which was strong enough (The bullish engulfing patten I marked with blue rectangle in the second part), and was also the rotation center violation on the h1 chart (The chart I posted is h4).

When we really look to trade momentum through-out a day then we should first book partial profits because of recent low tempo, can really force price to visit broken temporary support and resistance areas.

I would try to post another example If I have time to time as I have try to keep updating the chart whenever I spot any opportunity

Another Example of Mature trend Relationship with Candlesticks

We have a live trade going on which I would like to see how demand area behaves when trend is mature enough and look to reverse.

Role of strong Momentum Candles

or Elongated Candles

When we looking for a trend to reverse We Use following points as checklist :-

A. Liquidation ( How price has behave when sell-off taken place)

B. Recovery (Whether the attempt to recover was successful)

C. Momentum Candles (How price behave at strong momentum or initiative Breaks)

D. Candlesticks Traps (When price reverse, Does a candlesticks pattern entry was offered)

Above mentioned checklist, Is must have when we prepare any "Forex Trading Strategies",because these are strong points which are considered when we look to trade reversals and most important one for me strong liquidation after strong trend and after that attempt to recover and then was there any pullback entry was offered and then try to see the last but the strong that whether price reverse after that pattern amid strong momentum candles .

That is how We trade reversals and I would advice everybody to prepare a Journal or checklist to trade reversal or if you want to trade pullbacks I have shown some good strong points how to trade pullbacks in this blog and Would post again from time to time If situation demands or any requests are made.

Role of Elongated Candles in Understanding Contet

Role of Elongated Candles in Predicting the overall Picture

I got numerous of charts and request regarding How strong candles can works as strong reversals when we try predict it as a part of Reversal.

I will clear it in few examples that how we can see mature trend followed by bounce of the inner space of that elongated candles and then we see Price test the high after find the low of correctional bottom

Most of time In Currencies case, Price do tend to behave and take much more time in reversing rather in cases of stocks and commodities, When price does tend good time at the top then we always realize that It is holding high prices and will offer a pullback but it never come specially when first attempt to reverse it too strong as in this case

That attempt was so strong that it did not offer and candlestick pattern to offer pullback but if You watch the next attempt to revise from the Inside of elongated candle it does offer couple patterns which fails and price finally rise when it test that candle.

As I always suggest that never sell at the downside breakout or never buy at the upside breakout but try to built such trading strategies or breakout systems that offer lot of logic, As in this case. It's not easy to built a reliable systems but still for trading something has to have enough potential to compete with the best in the industry.

Forex Trading Strategies l Beginners Price Action Based On Supply and De...

Price Action for beginners supply and demand level Institutional activity