Hey hey: what's up my friends, so in today's training i want to share with you a candlestick trading mistake that almost all new traders make so, let's get to it. The mistake is this is that you are trading in no man's land. So what do i mean by this? So, for example, let's say this market right now is contained between this highs, and this lows: it's in the range market goes up to. The highs comes back down to the lows and goes back up to the middle of this range, and then maybe it forms a bullish, engulfing pattern or a bullish hammer whichever the case is, and you look at this man rainer, look how bullish this is.

It's time to buy no, not quite. Why is that? It's, because you are trading in no man's land price is in the middle of nowhere. If you look at this chart, you take a step back, you would realize the price isn't near the highest of the range or the lows of the range it's in the middle of nowhere and the problem with trading in no man's land. Is you get an unfavorable risk to reward and let me you know kind of prove it to you here with a chat example.

So if you look at this chart, this is the chart of dollar. Canadian price is contained between these highs here and there's a nearby swing low over here and over here. You notice that there is a huge bullish engulfing pattern over here or a huge bullish. Candle and traders will look at this.

Oh reina, look how bullish this is. The price is going to the moon. It's going to pluto it's time to buy, so where do they buy the price closed over? Here let's say you entered near the uh open of the next candle you'll, probably go along around one dot. Three, two: oh okay.

Let's say you get get long at this price, your stop-loss, a logical stop-loss would have to go at least below this swing low. Let's say: adhere 1.305. now what about targets? So if you look at target this is the nearest swing high over here, so your target is possibly around 134. So if you look at this from a risk to reward standpoint, you are risking this much from here.

All the way down to here this is how much you're risking and if you look at it in terms of pips, your wrist right, let's call it ri is about 270 pips and your reward. Your potential reward. Let's call it: re is potentially 80 pips right from 8 from 1.32 to 134, there's a potential reward of about 80 pips. So you can see you are risking 270 pips to make 80 pips, and if i just take my calculator over here, that risk to reward is a potential, almost risking a dollar to make 30 cents.

So, from a risk to reward standpoint, you can see that it's pretty darn unfavorable, especially when you're trading in the middle of nowhere. So again, if you look through your past charts, whenever you see that you're trading in the middle of nowhere just analyze, your potential risk to reward, where could the market potentially go to relative to where your stop-loss should be your risk to reward? Most of the time? Is less than one to one? Let me give you another example. So this one here pound canadian, if you look at the weekly time frame over here same thing, price - could make this bullish candle close over here and if you access, assess this chart right. Where is the logical place to put your stop-loss? I would say you know this would be the nearest price structure nearest swing low, possibly around 167..

Where could the boss market possibly go? I would say maybe into this area of resistance over here, so you can see that this is how much you. How much is your potential reward? Let's call it re, and this is how much you have to risk to make that reward. Let's call this ri. Does it make sense? Is this something that you want to trade? I hope the answer is no.

So that's the key thing that i'm trying to bring across is that when you are trading in no man's land, the risk to reward is usually unfavorable. It's kind of like in the ocean when you're in the middle of the ocean you're in uncharted territory. The risk is huge compared to if you're near the shoreline, or, if anything happens, you can just swim back to the sand, be safe and you know collect some seashells. So remember this right: don't trade in no man's land i'll, explain all right i'll share with you later.

You know where you should be looking for favorable risk to reward trades where to find them next one. You are trading far away from an area of value. What do i mean by this? So if you look at this, the problem with this is that it's usually too late to enter as the market is likely to make a pullback or a reversal. So let me illustrate to you what this means.

Let's say the market is, in a nice uptrend a series of higher highs and higher lows like this, and if you overlay with let's say a 50 period moving average, you might find that this type of market condition the price tends to you - know bounce off the 50Ma, here once in twice and right now - let's say the price is over here: the problem right when you're trading - or rather you can see as of right now. Let's say this: one here is the 50ma. We can conclude right that the 50 period moving average is an area of value. It doesn't have to only be the 50 period moving average.

It could be an upward trend line. It could be an area of support or swing low. So whatever the case is right. When the price is, let's say this point over here - let me just stretch it out for a bit at this point here.

It's pretty done far away from the 50 period moving average from here. All the way down here is the 50 period moving average. You can see that it's pretty done far away and when you're entering your trades, far away from the area of value. That is where the market is likely to make a pullback or a reversal.

And if you buy, when it's far away from the area of value. You're likely to get stopped out, so let me give you an example. So if you look at this chart over here, fiverr okay, so where is this chart area of value? So i would say again in this type of trending market conditions. This could serve as an area of value for this particular stock.

The 50 period moving average right almost tested uh once here twice three times over here, so you can see over here the 50 period moving average for this stock chart serves as an area of value, and you look at this price over here right now. At this point at 320, at this highs, do you want to be buying at this highs? Yes, i know it's in an uptrend, but do you want to be buying at this heist? Even though this market is in an uptrend? And i hope you say the answer is no, because no you don't want to because at this point the market could be, could likely right, make a pullback or even a complete reversal, and where will the pullback end? Chances are at this area of value. So this is kind of like a a swing down lower from here all the way down to here that you have to swallow. It's going to be painful, especially if you're buying at 320, and the next area of value is around 220 230.

So don't trade far away from an area of value, because when the pullback comes you'll likely get stopped out, let me give you another example. This one here is copper, okay, same story over here, so in this case the 50 period moving average. Also, here seems to be acting as an area of value tested once twice three times or, if not, if you're, not using the 50 period moving average, it could also be you know things like support resistance, where this is previous swing high, which could act as support. So you can see that the area of value here is around three dollars and 75 cents or 72 cents around there.

So if you look at this right, if you are looking, the price is not breaking up to this highs. Do you want to be buying at this heist when it's so far away from an area of value? You can look at it like a rubber band being stretched when the rubber band is stretched. The more you stretch it what's going to happen, the stronger the snapback is going to be right rather than stretch. It naturally needs to.

You know snap back towards you know normal size, so same thing for this type of you know trending market, where you can identify the area of value. Clearly, if it's stretched far away from the area of value, you want to be careful, i don't care what candlestick pattern. It shows whether it's a bullish, hammer, an engulfing pattern or whatever you know, uh kajangpute pattern. I don't care you have to be aware of the current price structure of the market, whether is it near or far the area of value.

So now, what now so earlier, i've shared with you two common mistakes that many traders make number one trading in no man's land number two trading, far from an area of value. So how should we approach candlestick trading? If we want to, you, know, use this tool efficiently and it's just a one-liner one-liner and by the way, if you're, enjoying this training so far smash the thumbs up button. If you don't, then hit the subscribe button, let's move on so what now? And it's very simple: what you want to do is to trade with the trend from an area of value. So, if you think about this, this one sentence has actually overcome the two problems or mistakes right that our traders have made that i've just shared with you.

So let me explain how this works so again: trade from trade with the trend from an area of value. So let's say market is trending up higher series of higher highs and higher lows comes back down into this area of value. Maybe previous resistance could become support. You want to be trading from this area of value.

That's one example, or another example could be. Let's say: market is trending up nicely like this comes back and we test this previous swing low over here. This could be another area of value or it could even be retesting right, a respected moving average like the 50 period moving average. That could be another area of value in a trending market.

So let me share with you a couple of examples before we conclude today's session. So first example to share with you: is new zealand yen? Okay. So if you look at this chart, let me just share with you you can see over here. This market is in a nice uptrend, forming a series of higher highs and higher lows.

So let's recap what i just said: trading with the trend from an area of value. So, what's the trend of this market on this time frame new zealand yen eight hour time frame, the trend is number one. Ah number two: are we trading near an area of value from the looks of this? We are now at this swing low. This area of support over here an answer is yes, trading, an area of value and number three.

This is where your candlestick pattern, your candlestick knowledge, comes into play at this point. You have something that looks something like a close to a bullish, engulfing pattern or maybe a piercing pattern. However, you want to define it and really the definition of the candlestick pattern isn't as important right as the context. That's what i'm sharing with you trading with the trend from an area of value.

Can you see the difference between buying here and trading in no man's land or trading, when the price is far away from an area of value, big difference? One more example: right, let me let me give you a stock trading example to see that this concept can be can be uh used for the stock markets as well. So if you look at this market, it is trading price chart trend. Number one yes check. Train is up number two area of value again this one over here at this previous swing high, which could become a support tested once and over here tested a second time and again.

What candlestick pattern is this: this is where your candlestick knowledge comes into play. It looks like a bullish hammer to me, so can you again see the difference right between trading with the trend from an area of value compared to trading in no man's land and trading, when the price is far away from the area of value? So this is what i'm trying to bring across right when you are trading with candlestick patterns. So, let's do a quick recap: number one avoid trading in no man's land because from a risk to reward standpoint, it's usually unfavorable and since i'm mentioning this right, let's now go back and analyze this from a risk to reward standpoint. If you look at this potential, let's say a potential trading setup, let's say you buy at 45 dollars.

Let's say your stop. Loss is at 37.50. Okay. So you, if you do the math right, your stop loss right.

Let's call it s it's about 7 and 50 cents, that's the size of your stop loss. What about your target? Let's say the nearest swing high before it right is here about 60. So from your entry point, forty five dollars to sixty dollars, your target right is a potential profit of. If my math is of me right, fifteen dollars so you're now risking seven dollar and fifty cents to make fifteen dollars or if you look at it from a risk to reward standpoint, you're risking a dollar to make two dollars.

Can you see now the difference between trading in no man's net and trading from an area of value? Can you i hope you do because if not right, then uh uh? You might want to rewatch this video again and smash the thumbs up button again. So, as i was saying, right avoid trading no man's land number two avoid trading far from an area of value, because this is where the market is likely to make a pullback or reversal and finally, number three right to really trade candlestick patterns right or to use Your candlestick knowledge remember trade with the trend from an area of value, or you might even know you know, plastic plaster. This on your wall. You know like a code or something like that to remind you to trade, with the trend from an area of value and by the way, if you want to learn more about such trading techniques, you know price action, trading, candlestick patterns and much more.

What you can do is go down to this site over here called price action trading secrets right. This is actually a 140 page color trading book, a physical trading book where we'll dive deep into price action trading, we'll talk more about candlestick patterns, support resistance. How to tell when the trend will end how to tell when support resistance will break down how to trade breakouts? How to trade reversal uh trading strategy templates that you can use right to implement in your trading. So all this over here on the website.

I'll put the link below if you're interested go and get a copy and with that's it. I wish you good luck. Good trading! I will talk to you soon.