A common mistake made by people trading stocks, Forex or other assets, is buying when the price is too high and selling when the price is too low. In this video, there is a quick method to identify tops and bottoms. Your trading method doesn’t need to change, just add these three steps before placing a trade.
As with all methods, this is not always going to be 100% fool-proof but it may just give you that edge.
- Draw a horizontal line where your potential entry is going to be.
- Switch to a higher time frame (4 hours, daily and weekly are recommended).
- Switch to a line chart.
Most retail traders don’t take advantage of line graphs. Instead, they choose to only use Japanese candlesticks or bars to plot price on their charts.
If you would like to learn more about Japanese candlesticks and the patterns they can create. Then check out Japanese Candlestick Charting Techniques by Steve Nison. Also, check out Econ Alerts recommended books page.