Broadly speaking, PAMM traders tend to follow a particular technical analysis and will pay attention to their favorite graphic to determine their choice of whether to be trend traders or counter trend traders. As the trend traders, they would rather pay attention to the trending graphics. Their mentor teach them a concept to always follow the trend and do not fight it. In the other hand, there are also some traders who prefer to become counter trend traders. These traders hold a very effective concept of buying when it’s cheap and selling when it’s expensive.
So, how do we know if a particular graphic is still a trending graphic or when do we have to make reversal? There are some tools that we can use to help us make a decision but for now , we will discuss about the candlestick view.
The candlestick view is the world oldest technique used in technical analysis. It was created by Munehisa Homma who lived in Japan in 1724 – 1803. It is a very common technique used in reviewing the market value movement so it can be used in any values such as forex, stock, commodity or any other investments.
What benefits that we receive by using this candlestick graphic? Everybody will easily understand this candlestick. From new beginners until professional experts will easily combine this candlestick graphic. The strenght of this graphic in analizing the health of the market can not be compared with any other methodologies of making graphic. The candlestick graphic often sends early signs before any other indicators do.
Remembering that there are many discussions about candlestick, now we woukd only talk about the correlation between candlestick formation to the bullish and bearish time, combine with the trend traders type and counter trend traders type. There are four types of candlestick formations as listed below :
1. Bullish Continuation Pattern
Where the fundamental graphic is the bullish value and the formation creates continuation pattern remains bullish. This is what trend traders like.
2. Bearish Continuation Pattern
Where te fundamental graphic is he bearish value and the formation creates continuation remains bearish. This is what trend traders like.
3. Bullish Reversal Pattern
Where the fundamental graphic is the bullish value and the formation creates reversal bullish pattern. This is what counter trend traders like.
4. Bearish Reversal Pattern
Where the fundamental graphic is the bullish value and the formation creates reversal bearish pattern. This is what counter trend traders like.
The strenght of the formation will be bigger than only one candle. We will select formation with the high reliable pattern type, although there other formations with moderate reliable pattern and a weak reliable pattern. With the chosen high reliable pattern of candlestick formation, your success possibility of your prediction will be bigger.
Keep learning and sharping your skill as a trader, and enjoy joining the existing PAMM system.