Hey hey: what's up my friends, so in today's training i want to share with you the three golden rules that you can't afford to ignore when it comes to candlestick patterns number one, all right, don't trade candlestick patterns in isolation? So what do i mean by this? So, let's say, for example, right market is in a downtrend right like this. Okay, then the price forms over here, like one bullish camera that looks like this and many traders will look. Oh rainer, look it's a bullish hammer it's time to buy, because that's what the textbook says. Hammer means buy.

Hammer is bullish. So so, what's the problem with this? Well, the problem with this is like you can think of the bullish hammer right like a toyota toyota, car moving at 50 kilometers per hour and on the other side of the road. It's this bullet train moving at 200 kilometers per hour when the two of them meet what happens? Well, luckily, the bullet train will just you know, ram the toyota into pieces and you know get crashed right and it's the same thing as this chart. I'm sharing with you over here.

It's like you know. The hammer is like the toyota. This downtrend is like the bullet train. What's likely to happen is that the downtrend is likely to continue and it will smash right that hammer down lower right.

So don't just trade candlestick patterns in isolation, because it's a recipe for disaster i'll share with you later on what you should do in the state. But the second thing to let you know is this: avoid chasing like a series of large range candles. So again, a common mistake that i've seen is that the market is bullish right, so it breaks out higher one candle, two candle three candle, and then you know traders they start to have the fear of missing out man right now. The price is so bullish.

I better get them bought this straight now. You know less, you know the price you know uh takes off without me. Well, here's the thing right. Whenever you look at a chart and it looks really bullish more often than not right, your gut feeling is wrong.

That's usually a bad time to enter a trade. So let me give you a few examples. So if you look at this chart over here - so you can see over here at this point, right price is bullish. Right.

Three big bullish candles in a row market is going to roof. Well guess what that's, where the market starts, to make a pullback or even uh reverse. So you can see look back over here as well. Bullish, bullish, bullish, bullish, bullish, bum.

We face the pullback okay, so this one here, bearish right, bearish, bearish, right, bum pull! So here's the deal right when you see a series of large candles right moving in that one direction, usually it's too late to enter the trade already. So, just you know stay away right from such uh such a price action that you see so another example. You look at this three bullish candles in a row. What should your top process? Be? It's not to chase not to buy this market, but it's to stay away from it.

So the first two rules that i've just shared with you are things that i want you to avoid doing. So how should you trade candlestick patterns, then here's a very simple formula for you. This is what i call the ta formula. It stands for number one.

You look for the trend, two area of value and three entry trigger, so, in other words, what you're looking for is for the market to be first, let's say: trending up higher in an uptrend. Okay. Second thing: you're, looking for the price to come towards an area of value, this could be things like an area of support, a swing, low, a respected, moving average. So, let's say in this case, it comes towards this area of support.

Okay, come to this area of support, then the third thing you're looking for is an entry trigger. So this is where your candlestick patterns knowledge come into place. This could be a bullish entry trigger like a hammer, a bullish, engulfing pattern. So let's say in this case we got a hammer, something like this okay, so when this happens right we have the tay formula, condition summary because we have the trend.

Uptrend price is at this area of value. Okay and we have a valid entry trigger to go long. So let me give you a few examples right on how this looks like. So this is the chart of cloud fair cloud flare.

It's a stock! You can see that this market overall, it's in an uptrend. Okay, so just put here arrow here, uptrend number: two: you can see that this market came towards this area of value right. It's an area of support, right support here, tested once twice, and then we are back here for third time. The third thing that we have is a bullish entry trigger.

You can see that you have a bullish hammer over here. Okay and the stick mix candle is getting another bullish price rejection. So you can see that how this is different from chasing the markets. How this is different right from trading candlestick patterns in isolation, you're, actually waiting for numerous conditions to come together to help you find right, a higher probability trading setup when you're trading candlestick patterns.

Of course, there are more things that you can look at, but i'll say this simple framework is good enough for you to get started so here's one more example right of the tay formula, so you can see this one over here. This is the houston mifflin harcourt company, what a long name, but anyway, first thing: the t formula number one stock is in an uptrend number, two we're looking for it to come towards an area of value. So in this case, price came towards this swing low. Over.

Here number three: it forms a bullish entry trigger over here. I think i covered it a little bit. Let me just remove the lines you can see. We have a bullish entry trigger this one is in the form of uh, i'm not sure what is the exact name of this bullish candlestick pattern, but you can see that it's bullish right and we're not just trading this candlestick pattern in isolation.

We are trading in the direction of the trend from an area of value, and then we have this bullish entry trigger to signal to us that it's time to enter a trade. So looking back a little bit, you can see that we have another setup over here. This one okay price came towards this area of value. We have this uh bullish price rejection over here then the market you know, continues up higher, of course, the charts that i've just shared with you.

They are all cherry pick, but the main point is to illustrate the concepts that i'm sharing with you, and i want you to do your work, validate the concepts that i've shared with you and see. You know if it works for you or not. So a quick recap: number one don't treat candlestick patterns in isolation. Remember the toyota, against the bullet.

Train number: two avoid chasing a series of large range candles because by the time right, the market is usually right for a pullback or even a complete reversal. The way to do it right is to go with a simple formula: what i call the tay formula, looking to trade in the direction of the train from an area of value and then look for a valid entry trigger to time your entry. So with that said, i hope you enjoyed this short training tutorial. If you do smash the thumbs up button, if not then hit subscribe i'll talk to you soon.

You.