Determining the Long-Term Trend Direction by Candle Pattern


It's important to know the direction of the long-term trend to avoid floating too long. Because floating will make equity be retained even if we are forced to limited equity can not do the OP again. To keep from being exposed to MC.We can use Candle pattern to determine the direction of the long-term trend. By looking at the pattern that occurs in large TF, TF D1 minimal. By using TF D1 we can know the direction of the trend for the next 1 week. TF W1 to determine the direction of the trend 1 month ahead. And so on. Adjust with a trading plan that will be taken.

Before using this technique it is advisable to know some Candle Pattern which will likely trend reversal. Have a look here or here
See the following example:

Long Trend Candle


The image above is a chart TF W1. With the last Candle  form Bearish Pattern. Trend will almost certainly go down in the next few days.

Candle Pattern

Candle number 1: The first reversal Candle that form a pattern.
Candle number 2: Candle confirmation of the first candle that reinforces the bearish trend is happening.

In fact the price does not necessarily fall on but sometimes when the trend is going on there will be a temporary break out. Because what we see above is the TF W1 so to break out of a candle could reach more than 100 pips.

See the following:

Reversal Trend

From this figure can be explained that prices are touching the support line W1. So there is the possibility of the price trend turns against Resistant up on existing lines on it.
To be sure we need to see a pattern in a smaller Tf for example H4. If the pattern H4 has confirmed the existence of a break out, we can use this as a new OP with TP that is not too large.

The chart above we can see in the TF D1 as follows:

Daily Trend

In fact D1 TF price has dropped considerably, so it is possible breakout time. But still be careful ... be aware of the actual direction of the trend. If you want to take advantage of the breakout, still take the TP is not too large.

H4 trend breakout

Chart Note that occur on H4 time frame above, the Red Line is Resistant lines as that of the previous W1 TF. And the Green Line is the line where we can put a SELL LIMIT is between 10-15 pips below Resistant lines.

Therefore, by knowing Long Term Trend  we can do to trade sustained. Of course the example above is just one case that occurred in PAIRS EUR / USD which I took. Please adjust with market conditions you are facing at the time of applying this technique.







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