Coming to the present article, it’s a very very simple concept that eliminates a lot of rubbish from the candlestick analysis part. First look at some charts before going into the meat of the article. Remember, from now on, when I use the word “level”, it means that I am referring to the levels defined using the method I have explained in the last article. So please don’t confuse them with another kind of levels like Fib., normal swing highs and lows etc.
Before going to what is what, the concept that I am going to explain is optional. If you like it, then try the test and make it a part of your plan. If it doesn’t make sense to you, feel free to dump it. I am focusing on things that help me to stay away from the charts as much as they can without letting me deviate from the feel for the market. This belongs to that category.
I don’t want to mess your mind with words for this as I already mentioned that it is very much optional. So let me put the whole gist of the article in one single sentence.
“If there are multiple candles within the range of one single candle, consider the whole series of candles as a single candle whose open is the open of the first candle, and whose close is the close of the last candle in that series.”
Yes. I am talking about inside candles. Just add them all to make a single candle as shown in the following figure and use the candle thus formed for the rest of your analysis.
So what difference does this bring into the analysis part of the trading? Let’s get back to the first two charts in this article now.
That’s it. Like I mentioned, test it, try it and use it if it works for ya. This simplified a lot of things for me in my trading and I hope you will also find some benefit out of this. Always make sure you are not complicating the already existing plan with the addition of new stuff.
Where else can you use it?
Can u pls elaborate on what else u would use it for? Thank you
There are few other areas where I subjectively use this, like, when there is a stall near the entry-level after the signal candle formation, I just add the candles to check whether entering on the break of LWP is still a good bet or not. I also use this to take a division whether to scratch the with trend trade or not. There can be many and I think it’s better if we find it ourselves as that gives us the confidence to use them without hesitation.