Podcast:

Not all candle patterns are equal
In this video:
00:32 – Why are the candles not making me money?
01:10 – Understanding technical analysis to help your trading
01:55 – Taking the high probability trade setups
02:24 – What are we looking for?
02:55 – Further in-depth analysis
03:54 – The extras we look for and teach our traders to do
04:50 – Trading from the right hand side of the chart is when you make money from trading
05:30 – Moving house and Cyber Monday sale
06:25 – Register your interest in the Cyber Monday sale
Not all candle patterns are equal. There's a big difference between what works and what doesn't work. Let's talk about that and more right now.
Hey forex traders, it's Andrew Mitchem here, at the Forex Trading Coach with video and podcast number 344.
I want to talk about candle patterns and how I can help you to select the best patterns.
Why are the candles not making me money?
You see, I've received an email just this week from a guy who said, “Hey, Andrew, done lots of research online. I've been looking everywhere. I understand candle patterns. There's 12 that I've identified. I spent a lot of time at my charts looking at them, taking trades off them, but the problem is I'm still not making any money. Can you help me and identify what my issue is?” Now, when I delved further into this, I realised that this guy six months ago started looking at candle patterns and he spent a lot of time looking at YouTube videos and just looking at sites online and forum sites, et cetera.
Understanding technical analysis to help your trading
He had done a lot of research in defining these 12 patterns, the problem is that not all candle patterns are equal. You need to understand that, and you need to understand a lot more information about technical trading rather than just saying, “Oh, here's a pin bar, or here's an engulfing candle, and I'm just going to trade it because it's a pin bar or an engulfing candle.” You cannot do that. That will not make you money. You can go and look at your charts. Have a look at the chart behind me, there's engulfing candles and pin bars and hanging man and all those different patterns that you hear about and candles that you hear about all over your charts. The problem is you can't just take every single one of them. It's just not going to work. There's a lot more research, a lot more finesse that you need to do into understanding them and what makes a good candle pattern.
Taking the high probability trade setups
So for me, it's all about getting high probability trade setting up. I want to take less trades, but high probability. What I'm grading is like A and A plus quality setups. Less is more, but it's all about identifying what it is about that candle, where it occurs within the chart, what part of the chart it's in, what the price is doing. It makes it from just an engulfing candle to yes, this is a high quality setup.
What are we looking for?
So it's all about things like looking at the previous trend, has there been a trend line break? Has there been previous exhaustion? What level has the candle bounced at? If it's a sell trade, has it bounced at a resistance level? Is that a random number or a pivot point? Is it a previous high? It could be all sorts of manner of things that we're looking for, but it's identifying that and seeing why that candle has bounced at that level.
Further in-depth analysis
You identify what potentially could be a good setup, and then it's a case of, well, looking into that further, do I have stop loss protection? Am I just going to place my stop loss higher the candle or a fib level. But if you have things such as like round numbers in the way or previous highs or the pivot point or the middle Bollinger Band or things like that,