3# Candlestick Reversal Trading System
Candlestick Pattern Reversal
Submit By Forexstrategiesresources
Time frame H4, Daily, Weekly.
CPI, Pattern Recognition Master;
Stochastic (14, 6,3).
All Entries will be based off of 4 Major Reversal Candlestick Patterns
using basic Japanese Candlesticks;
Stochastic must be in the oversold/overbought area (80/20);
3. Bullish Hammer/ Bearish Hanging Man/Shooting Star Patterns;
4. Piercing Line.
The Candlestick bullish patterns are confirmated by Stochastic being in Oversold area.
The Candlestick bearish patterns are confirmated by Stochastic being in Overbougth area.
Entry point will be based on the close of the confirming candle of the trend. Remember to only enter a trade after you have spotted a changing trend in which it has been confirmed by another candle after the reversal pattern, and with the Stochastic as a second confirmation.
In the pictures Candlestick Reversal forex system in action.
Stop loss for Long Entry:
place your stoploss 20 pips under your entry point or 10 pips
below the lowest candle point within the past 4 day period.
Stop loss for Short Entry:
place your stoploss 20 pips above your entry point or 2
pips above the highest candle point within the past 4 day period.
Target Profit on daily Pivot; to close position at the closed bar entry.
4H TF: EUR/USD 25 pips, AUD/USD 18 pips, GBP/USD 30 pips, EUR/JPY 30 pips, GBP/JPY 33 pips.
Daily TF:EUR/USD 50 pips, AUD/USD 40 pips, GBP/USD 60 pips, EUR/JPY 60 pips, GBP/JPY 65 pips.
Another option would be to insert a trailing stop once it reaches your 20 pips target. Depending on the currency pair, you will definitely need 10 to 20 pips worth of cushion due to the volatility. If you were to insert one of these, you could
then remove your profit target as well as your stoploss, and allow the “trailing stop” to adjust itself as the trend continues in your direction. It would act as a stoploss and a profit target all at once.
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Candlestick Forex Strategies