How to know what time frame to use and how to combine some elements.
As we pointed out, candle sticks cannot be used in isolation to the rest of price action, It needs context. What do we mean by context?
Context means other components on a chart that gives purpose. Purpose for resistance or support. That’s all we need.
What gives us purpose for resistance and support, the other chart elements. Meaning:
i) Support and resistance
iii) Moving Averages
iv) Fibonacci levels
The rules or process to conduct technical analysis which is then directly related to working out a trade:
This step is required for all your charts.
a) identify your support and resistance levels;
b) place your 10 and 20 ema;
c) identify your trend (time frame); accommodate your ema range with price:
d) place your indicators, eg macd;
e) identify formations and trend lines;
f) now look at the candle sticks as price approaches a) support or resistance andor Fibonacci or your moving averages.
This obviously requires you to know a, b, c, d, and e before making use of candle sticks.
*All of these are covered in the other modules.
Now for this exercise, we are going to place all of the above and now look at candle sticks and their formations to give us a signal.
This is covered in this video.