Trading Forex with Master Candle Trading Strategy

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Trading Forex with Master Candle Trading StrategyThe notion of the Master Candle is a popular trend in FOREX trading. There are many ways of trading with the strategy but the simplest way to describe the Master Candle trading strategy is a candle which is made up of the highs and lows of at least the subsequent four candles.

The development of a true Master Candle can be seen on a chart if the next four candles are consolidating inside of the tall Master Candle.

The Master Candle trading strategy is popular due to fact that it offers unambiguous patterns and as well assist to identify breakout points, which makes it particularly valuable for traders in the long run.

It is constantly helpful to follow a specific set of guidelines or rules when making use of any trading strategy. This is also applicable with the Master Candle trading strategy.

 

Rules for trading with the master Candle Trading strategy

  • Avoid trading close to a Support / Resistance (SR) zone.
  • Do not trade against a Support / Resistance zone that is nearer than the height of the Master Candle.
  • Just trade when a candle breaches the Master Candle’s High or Low.
  • For GBP/JPY) and GBP/ USD, the range of 40 to 105 pips is the most possible daily trading range and thus it ought to be utilized as a common guide when you want to day-trade the Master Candle strategy on these pairs.
  • Avoid trading if the size of the Master Candle is not within the pip range we mentioned above.
  • When you want to enter a long position, make use of the formula, “Put buy stop pending order 5 pips on top of High of the Master Candle + the Spread”
  • When you want to enter a short position, make use of the formula, “Put sell stop pending order 5 pips underneath the low of Master Candle”.
  • Profits will differ in pips and depends on the selected pair of currency and how volatile it is.
  • At all times, let your target be on the size of the Master Candle size before you exit the trade. If for instance the size of the Master Candle is 40 pips, your best bet is to set your profit target at 40 pips.
  • Put your Stop-Loss order in the reverse direction of the entry at the opposite end of the Master Candle. Thus, in a long trade, the stop ought to be positioned at the Master Candle’s low, even as in a short trade, the stop ought to be positioned at the Master Candle’s high.

Master Candle on USDJPY 1h chart

Master Candle on USDJPY 1h chart

It must be stated that it is not easy to trade with master candle strategy. Some forex trading professionals are of the opinion that master candle strategy offers to the trader a good number of false breakouts. This is particularly true when trading with volatile currency pairs that include JPY. The implication of this is that you need to be on the lookout for what is referred to as Scouting Parties.

These mean candles which make a turnaround after breaching through the Master Candle which can result to unsuccessful trades and losing trades. Because of this, a few forex trading experts stay away from entering on the first break of Master Candle. They rather wait till a scouting party is formed and then they enter after price breaches the the scouting party.

The Master Candle trading strategy is regarded as one of the easiest to use forex trading strategies. It is popular and used by many forex traders as a result. Furthermore, it is As well great for yielding promising results.

Nevertheless, the simple truth is that it doesn’t yield the same result all the time. Every forex trader that trades the FOREX market has peculiar style of decision-making and trading, therefore, it is anticipated that the effects may differ between two traders even though they are following equivalent strategy.

Thus, it is strongly suggested that you establish your individual conception of the Master Candle trading strategy and get good at by doing several trials and errors trials. Take real life situations and use it to make your decisions based on your peculiar experiences. Gradually, you will be able to refine your knowledge and skills and you will be able to make a better use of the Master Candle trading strategy.

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