Hello friends!We continue to disassemble the topic Price Action.In addition to basic setups, to which I attribute the pin bars, absorption model, the inner bar and fakey, there are some minor patterns.They are somewhat less strong, but on the graphs found, and in the presence of the reinforcing factors, such as support in the form of a level, it is possible to trade them.We begin with a pattern called "rails".
Definition candlestick pattern "Rails»
Pattern "Rails" consists of two candles, large size (should be allocated on the chart), multidirectional and large bodies (70 per cent or more of all the candles).Indicates this setup change of sentiment in the market and is considered a turn.
Factors that increase the setup
- Availability support in the form of a support / resistance level, Fibonacci, etc.
- Patterning at the end of the correction in the direction of the main trend.
- candles quantity (the larger the better)
entry and stop loss
Entering the market according to the rules
Stop-loss is set above / below the opposite extremum (High or Low) of the first candle (or two: choose the High / Low point which is farther away from the entrance).
Out of position
Pattern "Rails" usually indicates a short-term boost, which soon fades and moves into flat, so put some big goals, entering the market on this basis, it is not necessary.One of the ways out - the closest level of support / resistance, or take profit of 1.5 times greater than the stop loss.