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+60 Pips on Master Candle Break

Posted by Nick 9 Comments

Did you grab the 60 pip master candle break yesterday?

The master candle formed 135.90 and 137.36, it took a whole 8 candles before it broke. It broke the support at 135.90 and moved around 66 pips before it reversed. Realistically with spread this trade was worth 50-60 pips. The target was 60 pips from the line and the target was met.

Who made pips on this one?

Related posts:

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  3. Forex Education: GBP/JPY Trade Update (Break of the 207.00)
  4. Forex GBP/JPY Weekly Wrap-Up (Wk Strt 30/03/08)
  5. Forex Education: Weekly wrap-up for week starting 03/02/08
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  • orpips

    I read the blog entry on master candles but feel like I must be missing something. Isn’t that massive candle that goes from around 137.05 down to 132.30-ish a master candle? It engulfs 20 candles but the break of the high would only have moved about 30 pips before eventually coming back down. Then there seems to be another one five candles after the huge one that would have been profitable.

  • LucidObscuity

    I was wondering about what orpips is referring too as well. What is the significance of master candles nested within larger master candles? Should we only target the most recent? Should we avoid master candles which are too large or based primarily on moves related to big news?

    I also want to thank you Nick, for all the time you put into helping us. I’m still very wet behind the ears and only using demo accounts for now, but I have a good feeling about forex trading. I’m pretty sure I can learn the art. I use the word “art” intentionally as it refers to one of the many things I have learned here. It’s not about strict systems or complex math, it’s about pattern recognition and sociology/phycology. There seems to be a certain finess or feel to trading which I think your system attempts to capture in a logic fashion.

    Well done my friend; And thanks again.

  • FrankL

    It was a great and simple trade, Once the line was broken the price hesitated for a minute then took off and hit my target of 50 pips in no time (6mins) Gotta love trades like his, Quick and Easy!!

  • orpips

    FrankL, maybe you can answer the question in my comment above? Instead of using that as your master candle, why didn’t you use it as a *break* of the previous enormous master candle?

  • Mike

    It looks like people only post here the nice part of life, and nobody bothers about explaining to orpips the fact that he is right, and sometimes people see only what they want to see ignoring questions when they don’t have an answer. I belive orpips is right. Master candles do have meaning in using them, but these are good in only 60-70% of the time from my humble experience.

    Take care Orpips!

    PS: Don’t look for anwers in people that try to convice they are right no matter what. Instead post them 100 master candles that did not work!

  • NickB

    @Mike: How about you download the FREE e-Book buddy… I answer all the questions in there.

  • http://www.innergysoftware.com Victor

    I’ve read the e-Book but I can’t find the answer to orips’s legitimate question.

    Why was it wrong to take the break of the bigger master candle?

    The e-book only answers the opposite question – that it is sometimes risky to take breaks of master candles inside other master candles. But in this case we are talking about the ‘outer’ (biggest) master candle.

    Nick, any hints about that?

    Victor

  • Nelson

    Same question as above. Anyone? Just read the e-book five minutes ago in case you’re wondering!

  • NickB

    There is no one size fits all rule with any form of trading, including master candles. Master candles should be used in conjunction with other forms of analysis in my method.

    So did the high/low of the master candle line up with a scalp or S+R line?

    How old was the master candle?

    There are many of questions you need to ask yourself to effectively analyse the market. Was that trade bad? was it even a trade? I don’t know, looking back it looks like a weak but valid trade. However:

    - It was closing in on 24 hours of being open and the bullish line held no other significance beside it being a master candle high.

    - It seems like it was triggered after the London and U.S. sessions so the chances of a significant move are low.

    - It was triggered a few hours after the markets weekly open

    So I likely wouldn’t have taken since it is out of session and breaking in the first few hours of market open. Then add in the fact that the broken line was only significant as a master candle high and the candle was nearly 24hr olds.