Forget terminology. Focus on why. Without context, the candlestick is useless.
This is what we call a faker the market does not play by the books. these kind of things tell you when to stand by and when not to take a trade. Okay, so in this video what we're going to be discussing is my favorite candlestick pattern.
And most importantly is when you're working with the candlestick strategy. When does it work and when does it not work. Because the idea is every candlestick pattern should work instantly.
And that's not the case. I'll even share a trade with you that I've taken based on today's knowledge that I'm sharing with you guys and show you live how a trade is done. Let's get started.
Now, there's a big misconception when it comes to candlesticks, right? Everyone's looking at candlesticks is like, you know, if I just study all the patterns, I can trade all day long, and I can predict the future, right. so the journey begins with, you know, let me buy a book on candlesticks and let me study everything about a candlestick and what they're supposed to do.
Correct. When we see a candlestick. Okay.
We've got something like this call a dog. We see something like this. if it's colored in and then we see something like that hammer inverted hammer, pin bar exhaustion candle.
You know, we got several names for everything. You know, we see something like this. engulfing.
previous candle is engulfing the next candle. there's so much stuff there, right? So much stuff there.
Now, what I need you to understand is this thing Forget terminology. Focus on why. For you to make money in trading, if it's regarding candlesticks, do you need to go stand up at a podium and show how much knowledge you have?
know, your only job in trading is to always understand what must I do and why does it work like that? It is never terminology, learning systems, learning strategies. It's the why.
Why does something work let's take a look at this. Let's say markets are going up and then down and up and then down and then up. And then in this area right in there you see your dog or a gravestone that pattern.
What does that mean? everyone knows what the word is. But no one knows what that means.
what if that same thing occurred up here? so notice how things have changed now. So now it's like, wait, whatever happened to the candlestick design itself?
It's conditional now, isn't it? Okay. So keep that thing in mind and we'll go deeper into this.
I just wanted to tell you guys that it is all conditional, always, because the market does not play by the books. It is not a, A plus B plus C technique. Okay.
Now markets are going up and up and up. And then in here okay. This is a tricky one.
in there. On the last move up that went up so hard Let's say you get your, exhaustion candle right, or your pin bar, or your harami, or inverted hammer and hammer and all this stuff. Just like this in red.
That big. Okay, okay. It's it's all the other candles are like.
Okay. They're that size and that candlestick design shows up there. What does that mean.
So candlestick pattern also location is one thing okay. So remember this stuff. Location is important.
The next thing apart from location strength what is the strength following before the candlestick pattern showed up there? Very strong there very very strong. So you have to keep this thing in mind, right?
So. Let's take a look at this. Now in terms of logic.
Now what does it mean okay. So the markets are going up They come down very very deep. And then they go up again and then they stop.
Okay. If I went to a higher time frame and I had to draw this in one candle. This is how it's going to look like, right?
The opening price is here, which is this price. The closing price is this one which is right there. The highest point of the market was here, which is like that.
And you have a candle looking like this. What we are just doing is we're now looking at the universe below based on one candle. You know why?
Because this is why a candlestick was made to begin with. The rice trader back in the day who made the candlestick did not have a scalping strategy. Who was looking at the one minute charts.
He came in the next day. He looked at one candle and he understood what happened that day. And he's like, gotcha, I got it.
I know what happened. It is a knowledge piece. It is information.
Yeah, it'll be green. Now, let's let's take this even further. The markets are moving upwards and upwards and upwards and upwards.
And then closed right there. Okay, so If you take a look at this chart right here, okay. If we have to draw Just this piece on the charts.
So we got a movement. Here's the opening and here's the closing okay. So opening price is right here.
Closing price is down here. This is completely red. And then there's this wick on top till there Now prior to that you can see the movement has been slowing down.
Okay. Now, Why are we trying to look at the universe below and above and try to put it into one candle? Why is this critical?
to see what the big boy can also see. Okay, now If that same pattern occurred like this after all of this. But on the lower timeframe, all we see is.
Like that. That's what we see. But we have to see that, this is now clearly visible to the big boys as well, because they left the big wick on top.
This is what we call a faker on a lower timeframe. Don't wait. It's like, that that was a false breakout from a range possibly.
We have so many words for it. Yeah. You know, false breakout, a probe, a spike.
We call it so many words, but all it is or a railroad track, right? A candle that goes up, followed by a candle that goes down. This is another terminology railroad track.
But the language of that is on a higher timeframe. That's an exhaustion or a pinball or a rejection. Okay.
This is important to know. So the best pattern that I like are these two only. These two are my favorite ones.
However they need to be in the right spot after the right strength. Let's say on your higher time frame So pick a time frame. You're four hour is coming down dramatically like this.
It's a downtrend right. Okay. What's the time frame below the four hours.
We got the one hour right. It takes for one hour candles to make one for our candle. Correct.
So the markets are dropping down down down down down. And then you come into the one hour time frame and you're looking at this as I know my big boy is seeing this. He's seeing down.
Okay. You're one hour. The same thing looks like this.
Right. That you see a little bit more detail of. It's like more microscopic.
Correct. In this detail. You start to see a pullback happen.
Now pullback is starting to happen. But on the higher time frame. Do you think he cares.
No. So you have to also understand is a pullback significant enough that it makes a difference because why is a pullback important. If I draw a trend line which direction is this market.
It's clearly down. If it's clearly down And my job saying the four hour is saying a sell But everyone on the planet is looking at a sell. Can I make any money.
So what do I need? I need buyers, so I need some kind of information that says boom. Okay, everyone on the 16 minute just became a buyer.
Because why? people chase the market once you see the market's moving upwards, what does this look like now on a higher time frame and little tail. Okay.
He's starting to notice that a little bit before our guy. It's still a sell for him. He didn't become a buyer overnight.
But the 60 minute guy is like, oh my God, did you just see that? We need to buy all the euros on the planet. Because everything is going up for a buy and I don't want to miss out on my Ferrari.
So buy everything, So everyone mind goes into the buying, buying, buying. Right. So in this process of when everyone is buying.
Okay, let's take a look at this. Now okay. Just here you see a candlestick on top that looks like this.
What does that mean. what is the second main problem that people look at. Problem number two is what is our job much more intelligent retail traders.
What is our job in this situation. If our job is to sell, what happens in this situation is our mind only gets fixated on the sell, and we look at any signs, like a candlestick pattern that will judge us to get into the sell quickly without noticing. What the hell was that?
Why did it go so quickly? Why is there so much power? So now let me ask you the same question does your candlestick matter outside of context?
No. Without context, the candlestick is useless. you have the situation now.
The markets are going up. and in this process, I want now. Now there's two signs that are showing here.
It's showing us a sign that the crazy buyers who bought all this. Okay. Everyone up until here.
You all said it's a sell, right? Because that's how the market sees it. It's a sell.
Clearly. It's a sell as a sell happens here. They still think it's a sell.
In fact, that's when the selling begins. In that process of the sell, the first move up that happens. What does that do?
There. Stop down. They're not just stopped out there in panic.
This is what happens initially when people panic There is no action. But after the panic, when you see the markets are going and making higher highs, what do you do now? Now you buy.
Now you take action. you can now see and predict the human behavior of they're actually entering by is up in this area. No one bought over here.
Good. We have stage number one. We got everyone in the wrong direction.
And the four. Our guy is like, I still want to sell, right? He's like, I don't care.
This is nothing to me. Correct. So in this whole process, when you see this and you're like, okay, well I just saw my candlestick pattern, there is some relevance to it.
Now. The market is slowing down. I know everyone's a buyer, but I know the big boys are seller now.
You have conflict of interest. This time frame says buy higher time frame. So sell.
is what we call the money spot. The conflict of interest It's where all the action is going to take place. Okay.
So in this process, when you see this, two things happen. What does this look like on the lower time frame? If this was red.
It means the market went started from here. They went up. They crashed down and lower than before.
That's how it looks. Here's the opening price here. The closing price, which means They did not respect this support.
That is your first sign of there's a problem. That's what that candlestick actually means that support and resistance just got violated. If my support is getting violated, what does that tell me about the big boy?
Why is my support getting violated? this whole time my support kept pushing higher and higher and higher, but now my support starts to get violated. Now, Same thing happens here.
Who thinks of a sell at this stage? They don't think of a sell. There might even be some similar designs in here for exhaustion.
Candle. And they got burned by getting into early last time. then the markets will go somewhere like this.
Create all of its dodges and all of that stuff, you know, gravestones. And then when the market collapses, what happens to the public? That was a sign for a sell.
But who got in? Everyone who gets in now trying to attempt to hit the sells. Hit the sells, hit the sell.
What's the problem with attending and hitting the sells here you are now in the presence of buyers. You're in the presence of buyers and everyone is hitting a sell here. Even though the market might further continue down, it's not going to continue down without a nice bounce.
So, your trading is like this gauge. It's this meter okay. This side is early.
This side is late. If you're you need to trade right there like right here. That's where you need to trade.
If you're too early you're going to get stopped out. If you're too late You're going to need a very, very wide stop loss and you're chasing the market. You might even get spike down.
So we're looking at this chart for our chart. Right. What direction is our for our chart.
Our big boy here is Problem number four how much information are you looking at? Are you looking at stuff from here or are you looking at stuff from here? If you're trading for our Azure Big Boy and 60 minute as a time frame that you want to trade, does it matter what this whole move is doing?
That's like last month. It's too far back. That's problem number four.
Too much data. Let's take a look at this on, USD of Swiss franc on the four hour. So we're looking at a market that seems to be going up.
Pull back up, pull back up. It's not all these sequences right? let's take a look.
And all these movements that are going up and up and up in this up movement, when this pullback starts to happen. Do you think in that pullback what is the for our boys thinking in that pullback. Are they afraid of it or are they like who cares.
Support and resistance. They're looking at it as support resistance. They're like, I don't care.
That's a support equals resistance for me. Let's go down to the 60 minute. Now, since we're on the 60 minute here.
Up until this stage, anyone thinking. Of a sell? Nope.
Up until this stage, anyone thinking of a sell? No. Until this stage, it moves down drastically.
means stop our. For anyone who's buying very late. that's stage one.
What we need is something more dramatic. Okay? We get the next dramatic move.
get the next dramatic move. Price to even make a lower low. Okay.
Activities for sales begin. Now in this phase of cells that are beginning in here, we're still monitoring one major incident of how many people are getting in on the cells. We might be looking at like, maybe I should be buying it from here because looks like the sellers have died.
The buyers have come in And we're getting ready to go long. Right. What happens if you're wrong on that one?
Okay, so your first trade just by trading it very simply, your first trade stop loss. But here's the thing. When that stop loss happens, chances are you're not the only one.
Many people might have had a stop loss. But what do you think people are doing when they see this? Do you think they panic?
Yeah, even the buyers now who thought they were smart even they start selling. Okay. With these patterns.
Shows up now something here, a candlestick pattern. But the market is so much in a downtrend. How do I even know that this is supposed to be for a buy?
Let's take a look back at this on the four hours and see. Well, what are they looking at? It as?
They still don't really care when we're watching. Now when the market comes back up and closes for the four hours, let's take a look. Market comes up and it closes right here.
On the four hours and the one hour, it closes right there. from this movement down It's pretty aggressive. Right.
This is where your test comes in of how good are you at patience. you see your exhaustion candle. But now you're confused.
You know, your exhaustion candle or your pin bar or your, hammer. that thing showed up that you like, It's a sign of my big boy coming back. But the strength doesn't allow me to get in here.
I am not sure. Waiting a little bit and seeing this information come up. Once this information come up like that, can you now tell me On the four hour, what do you see?
It's the same exhaustion, right Let me let you in on a little secret. I'm going to go back down to the one hour, and I want you to monitor closely of. You see this thing here.
And do you see this thing here? The power. So the moment that it went down, we were like, I'm not really sure.
But the moment it went up faster, we're like, okay, now I trust the exhaustion candle. And that's when you can say it is now safe for me to try to enter this trade. Small details, big results.
Okay. You need to learn trading for what it really is. It's not just patterns and simple like that.
okay. There's a problem number five. People will enter at the sign the first sign of this because they cannot control themselves okay.
what if you enter here and your stop loss is here and your take profit is back of your recent high, what kind of risk reward is this? okay. This is something I want to straighten up with you guys today.
When you buy a house, how much percentage profit do you make on that house in one year? On average. 5%.
10%? 12%. Sometimes loss.
Okay. When you invest in the stock market in indexes, S&P 500, how much money do you get on return in a year? If you put your money in a fixed deposit account as savings in your bank and it's locked away and you can't touch it anymore, how much do you earn?
So I want you guys to answer me with this one question. Why is a one is to one which is 100% return looking so bad to you? Where else are you going to get 100% return?
See, this is the main problem with people. When they come into forex, they forget that they're in the same world that everyone else lives in, and they need to first get started, or 100% is already the next level. It's like a level people cannot imagine, but yet they want to make 400%, 500%, 1,000% in one single trade.
You have to graduate to that level. You have to go there slowly. here's an interesting one.
Take a look at this one. What does that tell you Why is the color green. Why is it not red?
It is still up. That means the opening price was here. The market went up, it got rejected, and it closed here.
Does that tell you anything about support, resistance being rejected? No. That means that sign is not good.
Even though it looks like an exhaustion or hammer and ball. Well, whatever you want to call it. But now you have an idea in your mind that, hey, there was some rejection, but the rejection is not strong enough.
Okay, Let's take a look at this one. You see this one right here? There's a nice rejection there.
Let's take a look at that, So this is the four hours. Markets are in a downtrend. In this downtrend markets are going down down down down down.
And we're looking for a some kind of a pullback We're looking for a pullback that we're like oh Can we trust this. And can we do the sell. So let's take a look at this how it looks on the one hour.
Now market start to move up here. First. Markets are moving up.
Now. If I draw the same downtrend line, do you think at any of these points anyone has turned a buyer? No.
Absolutely not. Okay. We saw an exhaustion candle here right on the four hours.
I'm going to show you I'm going to go back to the four hours. I'm going to re show it to you again so you guys can see it. It was a strong move up followed by a move down.
And it looks so nice. Let me go to the four hours. What a big rejection from the top.
See this, exhaustion, the violation, whatever you want to call it. Rejection from here. when I go down to the 60 minute, I want you to tell me.
What does that pattern tell you when you look at it like this? Can you tell me if that's a rejection? Tell me the up movement.
Tell me the down movement. So does that sell collapse from here? No, that means there's still buyer pressure coming.
Okay. these kind of things tell you when to stand by and when not to take a trade. You got to be careful of these things.
Okay, so here's another example of when you see a candlestick, can't just blindly trade it, nor you can't use like a candlestick and say, well, it's going to be perfect because this is also a support resistance. No, no, no, you can't do it that way. Also, it's not going to work like that, but just because of the support resistance and the candlestick that it should work like that.
You need more detail. this is a trade that's actually happening live. So, a lot of the information that went into make taking this trade comes from, the webinar.
It's a very straightforward trade, very simplistic approach, basically something from the mastering price section, you know, very simplistic, for the level of the mashing price section, this is a generic trade. If you just look at this, it'll make a lot more sense. And, you will get an understanding of.
Okay, I see why he took this trade, So I'll go ahead and pause it right now So it's just only a few more minutes after the trade just hit take profit. The total time for this trade, was basically around 15 minutes I took the trade, took it for around 3. 5 standard lots.
For those of you who work in units, I took around 350,000 units on this thing. this, you know, it turned out something small, like $129. You know something I want to do something small so I can show you guys, the trade live.
Because it's hard to spot a trade that's actually happening then and there all the time. There is a complete trade for you on Aussie USD. thank you all for coming.
and I look forward to seeing you guys next time. Cheers guys! Have a wonderful day!
