A bearish candlestick formation consisting of 2 candlesticks. A bullish candle followed by a bearish candle that ENGULFS the previous candle bringing price further down, which indicates there are more sellers than buyers in the market.
A sharp movement above or below the support or resistance area. When validated it indicates a strong and fast move in the direction price broke through. Breakouts are great to spot when using the rectangle tool to box in price while it is consolidating.
A bullish Japanese candlestick formation consisting of 2 candles. A smaller bearish candle followed by a bullish candle that ENGULFS the previous candle bringing price higher up. This formation indicates there are more buyers than sellers in the market.
A bearish reversal formation consisting of 3 candlesticks. The first candle will be bullish, followed by an indecision candle and ending with a bearish candle. This is found at the top of an uptrend. With other bearish confirmations, traders will look to place short positions.
Closing a certain amount of your active trade to secure some profit or minimize the loss without having to exit out the trade completely.
When price retraces in the opposite direction of the overall trend. It’s a quick pause in the overall trend before eventually continuing in the original trend.
To sell or have sold a currency pair.
A tool used to follow the direction of the market by linking the lower highs in a downtrend and higher lows in an uptrend.
BeginnerEarly Stages for Beginners8 Topics
Forex Terminology11 Topics
- Major and Minor Currency Pairs
- Basic Forex Terminology
- Pips & Ticks
- The Broker & The Spread
- What is a Lot?
- Stop Loss & Take Profit
- Margin & Leverage
- Retracement & Reversal
- When Can I Trade Forex? Sessions - Market Open and Close
- 3 Types of Analysis (Technical, Fundamental, Sentiment)
- 3 Ways a Market Can Go (Up, Down, Sideways)
Margin & Leverage2 Topics
Personal Psychology Questions2 Topics
Psychology for Beginners7 Topics
IntermediateIdentifying Scams2 Topics
Brokers for Beginners5 Topics
Technical Analysis13 Topics
- Types of Charts
- Understanding Japanese Candlesticks
- Candlestick Patterns For Beginners
- Single, Double & Triple Candlestick Patterns
- Support and Resistance
- Confluences w/ Candlesticks & Support & Resistance
- Counter Trend Trading/ Counter Trend Lines
- Moving Average
- Top-Down Analysis
- Consolidation Trading (Breakout, Retest, Continuation)
Market Structure5 Topics
CompletionRisk Management for Beginners8 Topics
Fundamental Analysis9 Topics
AdvancedUsing Indicators6 Topics
Technical Analysis (Part 2)8 Topics
Counter Trend Trading / Counter Trend Lines
Many traders use Counter Trendlines as a way to enter the market, which is called: Counter Trend Trading. Whenever you see a trendline, make sure you look within it, as it could help your ability to find better entries by trading the break of the counter trendline.
If the overall direction of a trend is bullish (up), you’ll be able to spot the smaller trend going down; that smaller trend is also called a pullback or retracement. This form of trading is best used to find entries when price is ready to continue in the direction of the overall trend.
You can use trendlines to follow the direction of the overall trend and use a counter trend line to follow the retracement. You are looking for a break and retest of that counter trendline to find your entry.
Common risks traders make is going against the trend and trading the counter trend. There is no guarantee when price is done retracing or if it is even ready to retrace. Trying to call it too early can lead to unnecessary losses. This requires discipline and patience. Allow price to break the counter-trend and complete its retracement before looking for entries.
In the illustration below, you can see the overall long-term trend is a DOWNTREND. Once you start scaling down to a lower time frame, you’re able to place counter trendlines and await the breakout for entries.