Euro / Canadian DollarEducation
Tutorial: Use candlestick shapes alongside SUPPORT & RESISTANCE
As you can see on the chart.
When price approaches previous significant support and resistance, the candlesticks formation look weak and start to flatten out. So lets think about what is going on here in terms of market psychology.
1/ The sellers who are pushing the price down will tend to take profit when they see price is close to previous SUPPORT => less sellers
2/ The ones who have been watching the market going down who didn't sell at the top will be waiting to buy at the previous support level => more buyers
3/ The buyers who have been buying from the sellers can watch the patterns and realize price is not going down further. Ergo, they are happy that their long positions may have the potential to go up in the near future now that there is no more selling pressure => buy more
===> Price bounces up at support.
That is it. But it does not work all the time. As long as you have SL, decent R/R ratio, even with 50% win rate you will be making money.
When price approaches previous significant support and resistance, the candlesticks formation look weak and start to flatten out. So lets think about what is going on here in terms of market psychology.
1/ The sellers who are pushing the price down will tend to take profit when they see price is close to previous SUPPORT => less sellers
2/ The ones who have been watching the market going down who didn't sell at the top will be waiting to buy at the previous support level => more buyers
3/ The buyers who have been buying from the sellers can watch the patterns and realize price is not going down further. Ergo, they are happy that their long positions may have the potential to go up in the near future now that there is no more selling pressure => buy more
===> Price bounces up at support.
That is it. But it does not work all the time. As long as you have SL, decent R/R ratio, even with 50% win rate you will be making money.
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