Master Candle Forex Strategy- We are looking to trade a breakout of the master candle formation “A breakout is when prices pass through and stay through an area of support or resistance.”
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What is a Master Candle?
There is a few ways to look at master candles but we will only focus on one. A Master Candle is simply a candle’s high and low which engulfs the next four candles’ high and low. I like to call the formation a True Master Candle (MC).
A quick run through of the above image, the MC = Master Candle is formed when C1 = Candle One, C2 = Candle Two, C3 = Candle Three, C4 = Candle Four are inside of the master candle.
We are looking to trade a breakout of the master candle formation “A breakout is when prices pass through and stay through an area of support or resistance.”
The main reason I like the master candle formation is because it represents the time in the market where price falls into a tight range for a normally short period of time.
We are looking only to trade True Master candles like in definition above. The main reason for this is they provide a clear pattern and break point plus over the long term better results. (From my experience)
NOTE: We are looking to only trade master candles on a 60min chart.
The most important part of the method.
5 pips above the Master Candle High + Spread. As you can see in the picture below the green line was our long entry
5 Pips below the Master Candle Low. As you can see in the picture below the red line was our short entry
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