Strong Candles Theory

Introduction

The Strong Candles Trading System identifies entry points based on the strength of the candle relative to the day's range. This system is suitable for both daily and weekly charts, providing traders with reliable entry and exit points.

How It Works

Setup

Enter LONG if the closing price is above 75% of the day's range and the previous candle has a smaller red body. Enter SHORT if the closing price is below 75% of the day's range and the previous candle has a smaller green body.

Entry

Buy at the day's high (LONG) / Sell at the day's low (SHORT)

Stops

• Initial stop for LONG position is the current candle's low.
• Initial stop for SHORT position is the current candle's high.
• Balancing stop is used after the first profit candle.
• Trailing stop is moved below the low of the respective candle after two profit candles. With each subsequent candle, the trailing stop is adjusted to the respective low.
• Time stop is used if the trade does not trigger a stop within 5 candles.

Time Frame

1 week, 1 day

Permanent Filters

• 50 % + X must tend in one direction
• Intermarket spread DJIA: Weekly basis
• 20-day average weekly basis
• Triple bar trend-following filter weekly basis

Volatility Filter

0.5 % - 2.5 % daily basis

Position Size

1 % of the account volume: Point distance of the initial stop = number of shares

Profit Target

2 R profit target for half of the position

Loss Brake

After 2 consecutive losses, the system is blocked for the applied timeframe. The same block applies to the traded base value.

System Highlights

• Advanced AI algorithms designed to spot market trends.
• Real-time analysis to make quick and informed decisions.
• Customizable options for individual trading preferences.

Optimizing Your Strategies

Discover techniques to maximize your trading success with our detailed guide on using the Strong Candles System effectively.

Download Full Guide

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Conclusion

The Strong Candles Trading System is more than a set of rules; it is a comprehensive trading framework that integrates technical analysis, psychology, and rigorous risk management. It equips traders with the knowledge and tools necessary to navigate the complexities of the market, maximizing opportunities while controlling risk. By applying this system, traders of all experience levels can enhance their market presence, making informed and profitable trading decisions.