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One Simple Strategy 2

This document provides a concise guide to technical analysis using candlestick patterns. It defines candlesticks and explains how they work. It then describes 4 common candlestick patterns - the Hammer, Shooting Star, Bullish Engulfing Pattern, and Bearish Engulfing Pattern - and what they indicate about market momentum and potential reversals. It also outlines a simple strategy of entering long or short positions when prices break above or below identified support and resistance levels on a retest. The document emphasizes the need for practice and perseverance to become a profitable trader.

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Javier Gamboa
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© © All Rights Reserved
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100% found this document useful (34 votes)
72K views19 pages

One Simple Strategy 2

This document provides a concise guide to technical analysis using candlestick patterns. It defines candlesticks and explains how they work. It then describes 4 common candlestick patterns - the Hammer, Shooting Star, Bullish Engulfing Pattern, and Bearish Engulfing Pattern - and what they indicate about market momentum and potential reversals. It also outlines a simple strategy of entering long or short positions when prices break above or below identified support and resistance levels on a retest. The document emphasizes the need for practice and perseverance to become a profitable trader.

Uploaded by

Javier Gamboa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MAKE MONEY WITH

ONE
SIMPLE
STRATEGY
Technical Analysis Simplified!
Dedication
This guide is dedicated to all traders out there, young and old. You are awesome and
I’ll see you on the battlefield.

The information contained in this guide is for informational purposes only.

I am not a financial advisor.

Any legal or financial advice I give is my opinion based on my own experience. You
should always seek the advice of a professional before acting on something I have
published or recommended.

No part of this publication shall be reproduced, transmitted or sold in whole or in part,


or any form, without the prior written consent of the author.

Users of this guide are advised to do their own due diligence when it comes to
making business decisions and all information, products, and services that have
been provided should be independently verified by your own qualified
professionals.

By reading this guide, you agree that I and my company is not responsible for the
success or failure of your business decisions relating to any information presented in
this guide

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The Secret to reading Candlestick
Patterns

What is a Candle Stick?


A Candlestick is a single bar on a candlestick price chart, showing traders market
movements at a glance.

Each candlestick shows the opening, lowest, highest and the closing price of a market
at a particular period of time.

What is a candlestick pattern and how does it work?


A candlestick pattern has 4 data points:
Open – The opening price
High – The highest price over a fixed time period
Low – The lowest price over a fixed time period
Close – The closing price

Here’s what I mean:

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For a Bullish candle, the open is always below the close.
And for a Bearish candle, the open is always above the close.
Next, you’ll learn a few powerful candlestick patterns to help you better time your
entries…
• Hammer
• Shooting Star
• Bullish Engulfing Pattern
• Bearish Engulfing Pattern
I’ll explain…

Hammer

A Hammer is a (1- candle) bullish reversal pattern that forms after a decline in price.
Here’s how to recognize it:
• Little to no upper shadow
• The price closes at the top ¼ of the range
• The lower shadow is about 2 or 3 times the length of the body
And this is what a Hammer means…
1. When the market opens, the sellers took control and pushed price lower
2. At the selling climax, huge buying pressure stepped in and pushed price higher
3. The buying pressure is so strong that it closed above the opening price

3
Bullish Engulfing Pattern

A Bullish Engulfing Pattern is a (2-candle) bullish reversal candlestick pattern that


forms after a decline in price.

Here’s how to recognize it:


• The first candle has a bearish close

• The body of the second candle completely “covers” the body of the first candle
(without taking into consideration the shadow)

• The second candle closes bullish


And this is what a Bullish Engulfing Pattern means…
1. On the first candle, the sellers are in control as they closed lower for the period

2. On the second candle, strong buying pressure stepped in and closed above
the previous candle’s high — which tells you the buyers have won the battle
for now

In essence, a Bullish Engulfing Pattern tells you the buyers have overwhelmed the
sellers and are now in control.

And lastly, a Hammer is usually a Bullish Engulfing Pattern on the lower timeframe
because of the way candlesticks are formed on multiple timeframes.

Here’s what I mean:

4
Shooting Star

A Shooting Star is a (1- candle) bearish reversal pattern that forms after an
advanced in price.

(The opposite of a Shooting Star is Hammer.)


Here’s how to recognize it:
• Little to no lower shadow
• The price closes at the bottom ¼ of the range
• The upper shadow is about 2 or 3 times the length of the body
And this is what a Shooting Star means…

1. When the market opens, the buyers took control and pushed price
higher

2. At the buying climax, huge selling pressure stepped in and pushed price
lower

3. The selling pressure is so strong that it closed below the opening price

In short, a Shooting Star is a bearish reversal candlestick pattern that shows


rejection of higher prices.

And one last one

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Bearish Engulfing Pattern

A Bearish Engulfing Pattern is a (2-candle) bearish reversal candlestick


pattern that forms after an advanced in price.

Here’s how to recognize it:

• The first candle has a bullish close

• The body of the second candle completely “covers” the body of the first
candle (without taking into consideration the shadow)

• The second candle closes bearish

And this is what a Bearish Engulfing Pattern means…

1. On the first candle, the buyers are in control as they closed higher for the
period

2. On the second candle, strong selling pressure stepped in and closed


below the previous candle’s low — which tells you the sellers have won the
battle for now

In essence, a Bearish Engulfing Pattern tells you the sellers have overwhelmed
the buyers and are now in control.

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My Simple Strategy

It took me 4 years to become profitable trader during


which I blew up several accounts, losing thousands of
dollars, until I found this picture so simple to
understand...

7
Trading terms you will need to know

CHOCH = Change of Character of the market/


change of trend

BOS = Break of Structure of a previous level

Retest = Price came back at a important key level


zone

Entry = Enter into the market, buy or sell

Target = Take your profit/Target price to hit

Stoploss = Maximum trade loss/exit the market in


case trade doesn't go in our direction

Ration (1:3) = Three units of expected gain to one


unit of potential loss would be represented as a 1:3
ratio

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Short Position / Sell the Market

This is like a reversal strategy that you can find in the market, but i found
it as well as in the continuation pattern.

First of all, for the Short Position, we have to identify the market
structure, in this case we have a Uptrend, with a green Support level.

Now, we have to wait when the price will break the support level, that will
create a Change of Character (CHOCH) and put our Sell entry on the retest
of the support level with a Stoploss above the structure

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EXAMPLES

10
MORE EXAMPLES

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MORE EXAMPLES

12
Long Position / Buy the Market

For the Long position is the same idea but opposite direction!

First of all we have to identify the market structure, in this case we have a
Downtrend, with a red Resistant level.

Now, we have to wait when the price will break the Resistant level, that
will create a Change of Character (CHOCH) and put our Buy entry on the
retest of the Resistant level with a Stoploss beyond the structure

13
EXAMPLES

14
MORE EXAMPLES

15
MORE EXAMPLES

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Some Final Words
Congratulations! If you have made it to this point, you definitely have the price
action trading spirit in you. I know I’ve provided you with a lot to think about in
this guide, but you now have the knowledge to take the information and apply
it into your trading. Here are a few final thoughts I’d like to share with you
before I finish up.

How Much You Succeed is All Up to You


The thing about trading is that it doesn’t care about your educational
background.

You can be a first-class honors graduate or a school dropout, but if you fail to
follow the rules of the market, it will take your money, regardless of your status
and background.

But if you follow the rules of the market, then how much you can make is
entirely up to you. You can trade 0.1 lot, 1 lot, or 10 lots, and your profits and
losses are just a matter of a few more zeros behind.

Rome Wasn't Built in a day


Trading is like learning a new skill. You need to be willing to put in time and
effort to be proficient in it. There are countless lessons to learn from the
markets and every mistake you learn is a step closer to profitable trading.

Most degree graduates spent 3 years in school studying. What about a trader
acquiring a skill that could feed him or her for life? Don’t think about the money
just yet. Just focus on doing the right things one step at a time.

Some take 10 years before being profitable whereas some never figure it out
and eventually give up. If you really want it bad enough, then persevere on and
always look at the big picture: the chance to one day be a consistently
profitable trader.

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My Simple Strategy

In real life, I do trade only this strategy, it took me some time to solve this
puzzle before I became profitable, and I'm confident enough of it. In this e-book
is just the idea of the strategy that I use, and you already can profit from it. You
can open the chart and start to find this behavior on different time frames and
markets.

But Do You Want To Better Time Your Entries & Exits—So You Can
Profit In Bull & Bear Markets Faster?

The good news is...

You’ll discover all these in The Ultimate Guide to My Simple Strategy, all
the secrets reveled and explained, that made me profitable with this Simple
Strategy:

How I start trading day = the real time when I open the charts

Pairs do I trade = best pairs that work for my Simple Strategy

Time Frame = what is the best time frame I use for charts

Entries & Exits = how and where I put my entries and stops

Risk & Reward = the risk/reward ration for my strategy is at least 1:7

Examples = a lot of latest examples of the strategy succeed


I Make You Profitable
I've only one goal down here. To help you succeed as a trader and make
money. I share with you proven trading strategy and technique: You apply it!

Find out more on my Telegram

Don't be afraid to ask for help!


Many people, including myself, are happy to help people out. You’d be
surprised. If you never ask, you will never know, right?

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