Enter and Exit Strategies using Trendline and Japanese Candlesticks

Why Do We Enter Or Exit a Trade

So over the last few days we have looked at upward, downward and sideways trending markets on our forex charts. I hope you've been practicing! Now we are going to look at entering and exiting trades using this information.

In our first real example from Sunday 23rds Asian open, we have a nice EURUSD trade during an upward trend.
We notice a trend forming and decide it has all the requirements we need. Nice slope (45 degrees, or there abouts) three points of contact with our trendlines. Bullish candlestick formations when it approaches the trendline at support.

When we see the trend confirmed, with the next bounce from support on our trendline - We enter our buy trade. We watch our trend continue in the anticipated direction.

Our trade continues in keeping with our predicted direction until we see a very clear indication that the trend is likely reversing. A bearish morning star doji briefly touches our resistance trendline, prompting me to close out the trade for a nice profit.

But, this is such a clear sign of reversal I decided to re-enter a sell order and follow the trade down. I decided, at this point, to recalculate the pivot points ( multi color horizontal lines on the chart ) and as soon as we reached our bottom point of support - the red line - a spinning top appears followed by a bullish candlestick so I exit the trade as this is also a clear reversal sign. You will see how our previous upward trend has been completely broken and we are now looking for the emergence of the next trend.

I decided to stand aside for the upward movement until there was another clear candlestick indicator. At the top of the movement there are a couple of bearish candlestics and I enter a sell order for the probable reversal. It looks like there may be a move to trade between the pivot indicators as the reversal is preceded by three tests at the highest point of resistance, but I exit the trade soon after (for a 10 pip profit) as I don't want to push it. I also decide not to trade for the rest of the day.
I have made a significant profit of double figure pips. All with the use of some very basic Japanese candlestick knowledge and a couple of trend lines!

To recap;-
Allways look for 3 points of contact on our trendlines.
Allways get confirmation of the direction from the candlesticks
Allways close out the trade at the first point of breakout.

Tomorrow we'll look at that spinning top candlestick in greater detail

Good fortune!
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