Do You Understand Candles?
In reality, the long term picture of a particular market is determined in most part (when the markets were free) by fundamentals. It really is that simple. However, a lot of people use candles as a means to enter into a position. While Candles can be useful at times they are mostly a trap for fools in the short term market.
I only really look at candles in the highest of time frames to get a true picture of price action. In other words the weekly to monthly candle charts. I don't trust very many of the shorter time frame candles because it is too easy for the liquidity providers and market makers to run price the opposite way of your position to the stop loss. This is the mistake that most traders make. They think price can't possibly move that far to get your stop. The answer is, "yes it can and generally will". The only reason why it wouldn't is if there is a more lucrative pay outgoing opposite to your position and they don't mind you coming along for the ride.
That being said Candles can be your friend in the shorter time frames if you know how to read them. You see what you initially see is nothing more than a set up for the people who rig the market. That is all it is.
Say you are watching the 30-minute time frame candles, what will you notice?
There are a number of things you will notice but for the most part, you want to notice that the majority of the move of the candle occurs within the last 5 to 10 minutes of the candle.
Why is that? (you might ask)
This is because the trap has been laid and set and in that time period, the candle will make its true move to generally get the stop of whatever positions have been taken or trap traders at a certain level. Happens all the time.
So that is the first thing. Wait. Wait until you see what is really happening on the 30 minutes to 4-hour candles before you take your position. This means waiting until the final few minutes of the candle to see what is really up. You will know it because the candle will start to move in a general direction that is most times predetermined by algos that know what you do before you do it.
If I am sounding like you have to be savvy in order to trade these days you definitely need to be this way. You always did to be exact. Often times you will hear me say "if you can't spot the sucker, it's you".
I am working on a new site to trade gold and oil. I want to capitalize on the new bull market in gold. Cheers!
I only really look at candles in the highest of time frames to get a true picture of price action. In other words the weekly to monthly candle charts. I don't trust very many of the shorter time frame candles because it is too easy for the liquidity providers and market makers to run price the opposite way of your position to the stop loss. This is the mistake that most traders make. They think price can't possibly move that far to get your stop. The answer is, "yes it can and generally will". The only reason why it wouldn't is if there is a more lucrative pay outgoing opposite to your position and they don't mind you coming along for the ride.
That being said Candles can be your friend in the shorter time frames if you know how to read them. You see what you initially see is nothing more than a set up for the people who rig the market. That is all it is.
Say you are watching the 30-minute time frame candles, what will you notice?
There are a number of things you will notice but for the most part, you want to notice that the majority of the move of the candle occurs within the last 5 to 10 minutes of the candle.
Why is that? (you might ask)
This is because the trap has been laid and set and in that time period, the candle will make its true move to generally get the stop of whatever positions have been taken or trap traders at a certain level. Happens all the time.
So that is the first thing. Wait. Wait until you see what is really happening on the 30 minutes to 4-hour candles before you take your position. This means waiting until the final few minutes of the candle to see what is really up. You will know it because the candle will start to move in a general direction that is most times predetermined by algos that know what you do before you do it.
If I am sounding like you have to be savvy in order to trade these days you definitely need to be this way. You always did to be exact. Often times you will hear me say "if you can't spot the sucker, it's you".
I am working on a new site to trade gold and oil. I want to capitalize on the new bull market in gold. Cheers!
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