Using Long Wicks for Stop Placement
As we all consult with the graphs throughout our live webinars daily, when”long wicks” introduce ourselves, we take advantage of them inside our trading plans.
Let’s Look at the Daily graph of this USDJPY below for example…
This USDJPY set is at an downtrend over the Daily graph Therefore we understand that we just will be looking for chances to brief (market ) the set. That said, note that the 3 wicked candles above which I have set ceases.
A Very Long wick at the Peak of a candle is created by buyers pushing the price higher and greater. Nevertheless, the lengthy wick is left when the candle closes as the buyers are unable to keep up that high since sellers came and pushed the purchase price lower.
Ideallythat informs us a movement to the disadvantage can take place as the bulls/buyers couldn’t sustain that movement into the up side and also the bears/sellers fundamentally won out throughout the time period. Since price couldn’t be pushed over the surface of this wick, it supplies an superb spot to put in an end since price recently analyzed that amount and also couldn’t trade it above.
The contrary situation is accurate when an Extended wick forms in the Bottom of a candle.