Price Action Candlestick Set

I am planning on launching a new set focused on candlestick analysis (see that announcement here). I began my trading journey by using candlestick analysis and have have continued to trade this way.

How long have I been trading using candlesticks?
I began trading using candlestick analysis in 2013. I found this method of analyzing price charts most natural to me. I have traded almost the exact same way over the years. I trade “naked” candlestick charts which means that I do not use any indicators on my charts. The only thing I add to my charts are horizontal and trendline support and resistance levels. I use these as levels as entry and exit points for my trades.

If you would like to see specific examples of my candlestick analysis you can see it here on my TradingView account.

How do I trade using Candlestick analysis?
Firstly, no trader will trade the exact same way as another. Even traders who use similar types of analysis, such as candlestick analysis. What you will see me describe here is my approach to candlestick analysis, which can/will be vastly different to other candlestick traders.

I separate price action analysis into two categories: patterns and signals. A pattern is any standard chart pattern such as a Head & Shoulders, Flags, Pennants, Triangles, etc. A candlestick signal is particular candlestick pattern that are generally comprised of 1 or a few candles such as a Pin Bar, Inside Bar, Engulfing Bar, etc. The patterns that I most often look for are Flags and Pennants. The signals that I most often look for are Pin Bars and Inside Bar Fakeouts.

In a nutshell I use the following general guidelines for any trade I take

  • I primarily enter trades from specific candlestick signals but will sometimes trade an arbitrary price level if I deem it a critical price level.
  • I primarily enter trades based on these 3 requirements: The entry signal is with the trend (or if price is ranging), the signal has formed on an important price level (local support, major support, local trendline, major trendline, momentum-based), and the signal itself is of good quality.
  • I rarely counter-trend trade. That means I normally do not short a bull trend or go long in a bear trend. The reason is because counter trend signals often fail. I may use a counter trend signal as an area to move a stop loss for an existing trend-following position.
  • While there are some general rules I follow when identifying patterns, this trading style is most discretionary. Any decision I make will ultimately be based on a personal decision after analyzing the entirety of the price action.

How do I specifically plan on managing the set?
Below is the guidelines that I plan on using to adapt my trading style to my set.

  • If there are no specific price action setups to trade then my set will be balanced based on my long term bias of the market.
  • If there is a specific price action setup I will increase/decrease my exposure to ETH to take advantage of that trade. Once the trade setup is finished(either reached profit or stoploss area) I will rebalance my set back to my long term bias.
  • I will use my sets balance ratio as a tool to manage risk. For example, I will not always have my set as 100% or 0% ETH. I will use various balance percentages to effectively “take profit” or manage risk of any given trade.

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