Using Forex Candle spikes to spot revesals

December 24th, 2007 expert Posted in FOREX TRADING STRATEGIES and CONCEPTS, FOREX TRADING ENTRY STRATEGIES |

Online Forex Trading Topic: Candle Spikes, Reversal formations, trend indicators.

When in doubt about where strong support or resistance is it is often a good idea to look for candle spikes. These spikes normally show areas where the price slipped into but where very quickly sent back from where it came. This shows strong support or resistance. The chart below shows how they could have acted as good trading support signals. Remember that long blue candle next to a red candle (or the other way round) is often also a disgusted spike because if you add them together they become a spike.

A stronger reversal formation is candle tweezers where 2 spikes occur directly next to each other (not shown in the chart).

candlespikes1.gif

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