Lesson 5 · Advanced Candlestick Context
What You’ll Learn
- Why candlestick patterns fail for beginners
- How professionals read candles using context
- Why location matters more than candle shape
- How candles confirm — not predict — price
📌 Candles are reactions, not signals.
The Biggest Candlestick Myth
Most beginners believe:
- Engulfing candle = buy
- Pin bar = reversal
- Big green candle = strength
Professionals know this truth: Without context, candles are meaningless.
What Candles Really Represent
Each candle shows:
- Liquidity taken
- Orders filled
- Reactions to structure & zones
👉 Candle shape matters only after structure, bias, and location are defined.
IMAGE EXAMPLE 1
Strong rejection candle at higher-timeframe zone
Strong vs Weak Candles
- Strong candle: Appears at correct HTF location
- Weak candle: Appears mid-range with no bias
IMAGE EXAMPLE 2
Bullish candle inside a bearish structure (trap)
Impulsive vs Corrective Candles
- Impulsive candles = displacement / intent
- Corrective candles = pullbacks / traps
📌 Never trade a candle without asking: “What is price doing overall?”
IMAGE EXAMPLE 3
Candle confirmation AFTER structure shift
Candlestick Rules (Checklist)
- Define HTF bias first
- Mark structure & zones
- Use candles only as confirmation
- Ignore patterns in the middle of ranges
Common Beginner Mistakes
- Trading every pin bar
- Ignoring trend & structure
- Using candles to predict reversals
⚠️ Candles don’t create setups — context does.
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