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As you can see in the chart above, our analysis was right, because it
was based on solid reasons to enter the market.
This is the method that i want you to learn to be able to trade the
market successfully. Look at another chart below:
The chart above shows two important buying opportunities.
The market was trending up, the formation of the first pin bar after the
retracement back to the support level was a high probability entry.
What confirms our entry is the rejection from the 21-moving average,
and the 50% Fibonacci retracement.
The same thing happens with the second pin bar that allowed us to
enter the market again and make more profits.
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THE CANDLESTICK TRADING BIBLE
Trading pin bars in range-bound markets
We can say that a market is ranging when prices don’t make any higher
high and higher low and start trading horizontally between a definable
level of support and a definable level of resistance.
Once i see that the market changes its behavior, i have to change my
tactics and adopt a trading strategy that fits this new market condition.
To confirm a ranging market, i have to look for at least two touches of
support level, and two touches of resistance level, and once i have
identified the range, then it becomes very simple to trade it by going
long when prices reaches the support level and going short when
prices approach the resistance level.
See below an example of a range-bound market:
As you see, as prices approach the key support or resistance level, we
have an opportunity to buy or sell the market; we need just to wait for
a clear price action setup such as a pin bar candlestick.
Look at the illustration below:
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