Master Candle

Master Candle E-book 

ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopier, a recording or otherwise without the prior written permission of the publisher and the author. Disclaimer Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex market. Do not trade with money you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this book. The past performance of any trading system or methodology is not necessarily indicative of future results.

Welcome to this e-book First off lets get the formal part over with, to find out about me as $ don%t like typing stuff more than once check out my profile page on the site. http&""www.forexbunker.com"community"index.php'"user"(phill" Now that is over we move onto the assumptions. i!im"m re#"ireme!ts o$ "si!% this metho&. !asic understanding of& )ow to place trades, )ow to read charts, trends etc )ow to read candles !asic technical analysis !asic fundamental analysis *nderstanding the risks of trading Recomme!&e& re#"ireme!ts o$ "si!% this metho&. +inimum reuirements above and -ractical use of technical analysis in trading

What is a aster 'a!&le(

The aster 'a!&le De$i!e& There is a few ways to look at master candles but we will only focus on one. 0 +aster 1andle is simply a candle%s high and low which engulfs the next four candles% high and low. $ like to call the formation a True +aster 1andle 2+13.

) aster 'a!&le etho&

etho& O*er*ie+ /e are looking to trade a breakout of the master candle formation “A breakout is when prices pass through and stay through an area of support or resistance.” 

The main reason $ like the master candle formation is because it represents the time in the market where price falls into a tight range for a normally short period of time. /e are looking only to trade True +aster candles like in definition above. The main reason for this is they provide a clear pattern and break point plus over the long term better results. 2From my experience3 NOTE, We are looki!% to o!l) tra&e master ca!&les o! a mi! chart.

What +e are looki!% $or/ /e are 9ust looking at 9ust two pairs which are. :!-"*;D < :!-"=-Y 5n these pairs we are first looking for a master candle to form and after that

E0am1les o$ +hat +e are looki!% $or

The above picture is an example of a null trade where the break of the master candle did not happen within the !( !6 or !7 candles.

R"les very method has rules and this one is no different. !ut remember rules are meant to be broken 2sometimes3. • • •

No Trading into a ;? 2;upport"?esistance3 @one $f the ;? @one is closer than the si@e of the +aster 1andle then no trade. Trade only on the !( !6 !7 1andle%s breaking the +1 )igh">ow

Pair Rules: :!-"*;D, :!-"=-Y Trade +aster 1andle si@es between 8A(AB pips $f +aster 1andle is greater or less than the above si@es then no trade. • •

E!tries The most important part of the method. Longs: B pips above the +aster 1andle )igh C ;pread. 0s you can see in the picture below the green line was our long entry

Shorts: B -ips below the +aster 1andle >ow. 0s you can see in the picture below the

E0its $f you want to make money you need to close your trade at some point. Profit Targets: -rofits will vary in pip from pair to pair but as a general rule you want to target the si@e of the +aster 1andle. ;o if the si@e of the master candle is 7Bpips we set our profit target at minimum of 7Bpips as the example below. Now saying this it is very important that we base our target on price movement over a strict rule of +aster 1andle si@e. ;o if the next price area that you can see a turn around is Apips away then you should be targeting there.

Stop Placement: ;tops are meant to be used to give you the +0E$+*+ possibility to win in your trade. Their placement will also clearly show you that your direction was incorrect. /ith this in mind the stops are placed on the other side of the master candle entry.

Res"lts ach trader that trades a method brings their own style to it also each trader will bring slightly different results. 5n this note $ have decided to give the

'hart E0am1les

GBP/USD  Su!!ary of trades. Number (& ;unday " monday gap trade which is a leave alone trade Number 6& Nice short setup 2!63 Number 7& Nice pull back for a long setup 2!63 Number 8& 0fter the break up to the number 7 setup and pull back to this @one was a nice short. 2!63 Number B& ;trong break short. 2!73 Number H& No break on the third candle so no trade Number I& !reak by (7pips from memory this trade took a while to give profit. 2!73

GBP/"P#  Su!!ary of trades. Number (& Nice clear break for profit. 2!(3 Number 6& -ull back to support @one ready to copy number (. 2!63 Number 7& No trade as there was no break on third candle. Number 8& :reat short setup while price stalled at that level. 2!63 Number B& ;hort break on second candle with a uick stop. 2!6 then stopped on next candle3