Higher high lower low trading strategy pdf

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Nov 25, The foreign exchange market forex, or currency market is a global decentralized market for the trading of currencies such as rial, dollar, euro, Users trade online urdu,seo fatwa pakistan,forex tricks free,earn money online video. The two matching highs forms when two candlesticks close with similar or identical highs. On the other side of the fence, we have two matching lows, which is a bullish reversal pattern that forms when two candlesticks close with similar or identical lows.

This might be a little controversial to James16 disciples, but the best way is to simply not trade the strategy at all. Both patterns form when two candles make similar lows or highs.

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This shows the bulls or bears have overwhelmed the other side, which gives the pattern a much better chance of causing a reversal. If you do fancy trading them, make sure you only trade the patterns that form either with long wicks or when the 2nd candle has a long wick in the direction of the reversal. To the uninitiated, these candles just look like bullish and bearish engulfing patterns — reversal patterns that form when the body of a candle closes bigger than the body on another, smaller candle. Outside bars, or outside vertical bars as James calls them, are just like the engulfing candles we all know and love.

They form when price engulfs the body of the prior candlestick, and show the bulls or bears have beaten the other side and came out victorious.


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Unlike engulfs, outside bars form when the engulfing candle is bigger than the RANGE of the prior candle. In other words, not only is the body of the engulfing candle bigger than the body of the preceding candle, the highs and lows are also bigger; the high is higher, the low is lower. Outside bars are one of the James16 core strategies, and there some easy ways you can dramatically increase their profitably. The pattern forms when price rises but falls swiftly on the next candle, resulting in a bearish candle followed by a larger bull candle, indicating a complete reversal of the prior momentum.

Unlike the typical bearish engulf, the bearish outside vertical bar always has a lower low, higher high, and lower close than the preceding bear candle.

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The first candle is always bearish and is followed by a bullish candle that has a higher high, lower low, and higher close than the prior candle. It signals the bears have overwhelmed the bulls, making a reversal to the upside likely. As with most patterns on this list, if you want to really increase the success rate of outside bar, watch for them to form at important technical points. Seeing an outside bar form at a support or resistance level is typically a great signal.

The level provides a likely point where price could reverse, and the outside bar confirms the banks want price to reverse away.


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  5. James16 mainly uses these to get into trends, waiting for price to retrace before entering when a pattern forms at one of the retracement levels. Both methods can be enhanced further by seeing if the levels have confluence with other technical points. For example, if a support level lines up with a fib retracement, that gives price a better chance of reversing because two points of interest are lining up at the same spot. The best points to watch for confluence are as follows….

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    Outside bars come in all kinds of shapes and sizes. These have a low probability of being successful, owing to how outside bars form. Outside bars form when the bulls and bears battle it out, with one side being ultimately beating the other. The body size of the engulfing candle reveals how badly the other size was beaten. If an outside bar forms with a significantly bigger body than the prior candle, that shows the other side got completely overwhelmed.

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    The momentum behind the reversal is much, much higher, giving price a better chance of reversing. So, to improve your win rate with outside bars — and engulfs too actually — only trade the big patterns…. They reveal more momentum strength behind the reversal, meaning: price has a significantly higher probability of reversing.

    The only exception to this are patterns where both candles are large, like you what you see below…. That momentum is highly likely to continue on the next candle, giving the pattern a good chance of causing a reversing once it completes. Simply wait for price to enter a zone, see if a bullish or bearish outside bar forms bullish for demand zones, bearish for supply zones , then enter a trade and put your stop slightly above the opposite edge.

    While pin bars were around way before James16 came on the scene — they were called hammer candlesticks back in the day — it was only when he started his thread they explored in popularity; becoming one of the most popular price action reversal patterns. Pin bars are highly versatile, being traded, and used in lots of different ways. The bullish pin bar is a single candle reversal pattern that forms during downtrends, downswings, or consolidations, and signals a reversal to the upside.

    One of the most common patterns in all of forex, the bullish pin bar forms when the banks buy into heavy selling, causing a candlestick with a long lower wick and small body to form. You often see bullish pin bars form at major reversal points, creating significant swing lows.

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    The bearish variation of the pin bar, is of course, the bearish pin bar. This pattern only forms during downtrends, downswings, or consolidations. It forms when the banks sell into significant buying pressure, resulting in a candle with a long UPPER wick and small lower wick that indicates price could be about to reverse. Both the bearish and bullish pins can close either bullish or bearish. For the most part, James16 trades pin bars in much the same way I do; by waiting for them to form at important technical points, such as support and resistance levels.