Trading strategies — Mother Candle. Here is another Trade Plan using simple candlestick analysis. The idea on this strategy is to catch a break from a sudden move of a big candle move. It can be done on any time series of chart, but recommended on the 10 or 60 minute charts. Lower time series charts are subject noise. Identify a large bar length candlestick from the low to high of the candle , that has a bar that immediately follows this bar whose high and low are between the first.
The large first candlestick is called a Mother candlestick and the smaller one is call the child. The amount of ticks you use may vary depending on the instrument and time series you are using.
Sometimes as well you may want use limit orders a few ticks in your advantage when the Mother candlestick range is broken. Ensure you are trading in the direction of the 20 moving average of the time series you are using. Take a look at the thumbnail chart that shows this concept. The Mother candlestick is marked in blue and the child is marked in green. See if you can work this out and let me know how it works for you. Trade Plan — Mother Candle. Watch the Mother Candle Trade Plan explained in the video below.
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