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Common Beginner Mistakes
โ Trading every engulfing candle
โ Ignoring trend direction
โ Ignoring higher timeframes
โ Entering without confirmation
Day 4: Candlestick Analysis โ Learning to Read Market Intentions
Introduction
Candlesticks are the language of price.
Every candlestick tells a story about the battle between buyers and sellers during a specific period.
Practical Example
A bullish engulfing candle forming at support inside an uptrend has a higher probability of success than the same pattern appearing randomly.
Trading is about stacking probabilities.
Trading Tips
โ Combine support and resistance with market structure
โ Wait for confirmation before entering
โ Higher timeframe levels are generally stronger
โ The more times a level is respected, the more important it becomes
Role Reversal
One powerful concept is that:
Old resistance can become new support.
Likewise:
Old support can become new resistance.
This happens because market participants remember previous levels.
How to Draw Support and Resistance
Instead of drawing exact lines, think in terms of zones.
Price rarely respects a level perfectly.
Support and resistance are better viewed as areas where traders become active.