Fibonacci retracement tool:
I use the 61% and 50 % Fibonacci
retracement to find the most powerful areas in the market.
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THE CANDLESTICK TRADING BIBLE
Trend lines:
drawing these lines on your charts give us an idea about
the market direction and help us find the most important reversal
points in the market.
When you are analyzing your chart, you are not obligated to find all
these levels to determine whether the trade is valid or not.
If you can find just one or two factors of confluence that come up
together with a good pin bar setup, this is quite enough to make a
profitable trade.
For example:
an obvious pin bar signal near support or resistance level
in line with the direction of the market.
See the illustration below:
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THE CANDLESTICK TRADING BIBLE
In the example above, we have a high probability setup with four
factors of confluence.
1-
The Trend:
the market is trading up which means that we have to
follow the trend and look for a buying opportunity.
2-The level:
The support level is an important key level in the
market.as you can see, price broke out of the resistance level that
becomes support and pulled back to it.
3-The signal:
The formation of the bullish pin bar after the
retracement back to the resistance level that becomes support.
4-Another signal:
The rejection of the pin bar from the support level,
and the 21 moving average that acted as a dynamic support level.
All these factors work together to give us powerful trading signal to
buy the market.
See another example:
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