This article demystifies ‘Candle turning points’
Price action in the chart is the reflection of the “commitment” of traders and Investors. This price action can give the trader high probability information about short term turning points as prices move up and down in trends and consolidation areas.
If trading is about looking for the high probability entry points then the exit should be based on high probability turning points as well. This is where the stop loss can be trailed to take profits on a move from the entry. When analysing price action in any time frame it is very common to find these ” turning point” candles which give an indication of a high price area or a low price area.
The Doji candle is where the opening and closing price are the same, but during the trading period the price has fallen below the opening price and rallied above the open price.
The Hangman is often found in both high and low price area’s and can indicate a turning point for higher prices.
The Shooting star is often found in high price area’s and can indicate a turning point to lower prices. Confirmation is often sought before acting on the one price line and stop loss rules should always be in play.
Time Frames These types of candles can show in any time frame from 15 minutes to daily and weekly. They are also useful in decision making in the FX and Futures markets. Take notice and make them part of your trading plan.