I want to talk today about something that I use every time that I want to trade short or long in every single pair or even other financial markets such as indices, commodities or even stock. Confirmation is very important for me right now in everything really, with entering a trade, close and even hold a bit more sometimes.
I get confirmation in 2 things, candlestick patterns and indicators (stochastics, RSI). I wait for these 2 to give me a signal so I can decide what I will do. But however, I don't allow indicators to make me go to the trade. Indicators own its name says everything, its just to gives us an INDICATION of what MIGHT happen.
Candlestick patterns is a technique of trading that I gathered few years ago and has really helped me to identify opportunities in the market. Here are the formations that I try to find in the graphs:
I try to find these formations on the graphs, but not any graph. I am only looking at daily, weekly and monthly charts. The reason is simple, if I look on smaller graph such as 1 hour for example, I will find many formations but 2 things might happen; i) not follow through, ii) false signal.
Having said all that, wait for the market to act in a zone of support or resistance before you jump in and hope that works. Of course we loose some pips because we waited, but at least we waited and got in with a greater chance to the trade to work.
I hope you guys take this into account.
Take care.
Good Luck!
By Thiago Duarte
Chief Strategist at Duarte Investment Group
thiago@duarteinvestmentgroup.com
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