The candlestick trading bible

71
THE CANDLESTICK TRADING BIBLE 
-The market structure: 
the weekly analysis will help you identify if the 
market is trending up or down, or it is ranging, or choppy market. In 
general, you will know what the big investors are doing. And you will 
try to find a way to follow them on the smaller time frames using my 
price action strategies. 
-The previous candle: 
the last candle on the weekly chart is 
important, because it tells us what happens during a week, and it 
provides us with valuable information about the future market move. 
When you identify these points using the weekly chart, you can now 
move to the daily chart or the 4h chart and try to gather information 
such as:
-The market condition: 
what the market is doing on the 4h time 
frame, is it trending up or down, is it ranging, or is it a choppy 
market. 
- what are the most important key levels on the 4h or the daily time 
frame: 
this could be support and resistance, supply and demand 
areas, trend lines…. 
-price action signal: 
a candlestick patterns that will provide you with 
a signal to buy or short the market. This could be a pin bar, an 
engulfing bar or an inside bar… 
Let me give you an example to help you understand why it is 
important to adopt the top down analysis concept in your trading 
method and what is going to happen if you don’t look at the bigger 
time frame before switching to your primary chart. 
Look at the illustration below: 

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72
THE CANDLESTICK TRADING BIBLE 
As you can see in this weekly chart above, we have gathered two 
important points that will help us decide what to do on the daily time 
frame. 
The first point is that the market approaches to an important weekly 
resistance level that will represent a hot point in the market. 
The second information is the rejection from this key resistance level, 
as you can see the price was rejected immediately when it approaches 
the level, this indicates that there are sellers there and they are willing 
to short the market.
What confirms our analysis is the formation of the inside bar false 
breakout patterns that indicates a reversal. 
Now let’s switch to the daily time frame to see what is going on in the 
market: 

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