C andleTick strategy combines the power of Candle pattern formation and Tick Charts, along with Price Action analysis.
Candle Patterns such as Hammer, Engulfing, Piercing are widely known and understood. Identifying these patterns as they happen is only the beginning. What makes this strategy is so powerful is “where ” these patterns takes places and that’s where Price Action Analysis comes in.
Before we go any further, it is important to understand that simple candle patterns are what we are after, patterns that you are already familiar with. In fact most of the information about this strategy you may already know. The key is to put everything together which make profitable and easily trade-able.
You must be wondering how does Tick charts fits in. But first, if you don’t know what they are then I’ll explain soon in coming chapters. So far, in other strategies we have been using Tick as “Bars”, which is great for spotting patterns. Bars makes it easier to remove clutter and makes it easier to pick patterns such as Flags, triangles etc.
CandleTick strategy brings the power of Candles to Tick charts. On one hand Ticks represent true Price Action and Candles, on the other hand, provide clues on market sentiment. When combined together they become quite a powerful tool. We not only can read market movement as they happen but also know when momentum is slowing down and time to get out.
The great thing about this strategy is that it can be taken to any higher level timeframe and enable you to catch larger price movements. In later chapters I’ll explain how this could be achieved. Not only this, the real power of this strategy is when we hold on to trades for longer periods (Position Trading), essentially entering trades with 10-15 pips Stop Loss with an aim to profit 300-500 pips or even more.
Let’s start with Tick Charts, explained in the next section.