Price Action Strategy lover

Double Low Higher Close (DBLHC)

Double Low Higher Close is another classic bullish reversal pattern loved by Price Action traders.

What are Double Low Higher Close (DBLHC) Patterns?

The DBLHC pattern consists of two candles.

The Lows of both candles need to be very close (within few pips).

The Close of the 2nd bar need to be Higher than the previous bar's high.

Why are Double Low Higher Close (DBLHC) Patterns formed?

Price tests support level twice but is rejected and cannot close below.
DBLHC pattern represents a sudden shift in the order flow, which can often be a telling sign of a short or long term uptrend.

How to find Double Low Higher Close (DBLHC) Patterns?

Price Action Tracker has you covered, the candlestick scanner will scan, in real time, all your favorite markets and time-frames and alert you as soon as a Double Low Higher Close (DBLHC) Patterns is detected.

How to trade Double Low Higher Close (DBLHC) patterns?

Double Low Higher Close can be traded as a reversal candlestick pattern when found at the bottom of a short term trend and validated by support levels.

Where to Place your Entry, Stop Loss and Take Profit?

There are three ways to enter a Key Engulfing reversal trade. They all have Pros and cons and really depend on the trader as well as the market conditions.

Aggressive entry (Candle close Entry)

Simply place a market entry.

Standard entry (Break of candle Entry)

Enter on a break of candle by placing a stop order just beyond the candle (1 or 2 pips).

Retracement Entry

Wait for the market to retrace to some extent before entering a trade.
Using retracement entry to get better Risk: Reward scenario can be very profitable but you might miss on a lot of trade if the market doesnt retrace.
Most traders always use the 50% retracement entry, but before deciding of a % figure you should always ask yourself what kind of price action environment are you in? Are we in a trend or a range? What are previous high and previous low? And then decide where the retracement entry would make the more sense (could be 33%, 60% or even 75%).
Going for a 50% retrace entry each time will get you a retail traders entry, not a professional one.

Stop loss

Stop loss is a level in the market that would need to be breached for you to be prove wrong and get you out of an investment.

A good rule of thumb is to place your stop loss few pips beyond the tail of the bar.

When to move Stop Loss

Once a trade has triggered and price has moved in your favor a bit, you can move your stop loss to break even.
I personally move my stop loss to break even once a candle has closed above the 1:1 target.

Take Profit

This is left to the trader’s discretion, however a good profit target is to use the next key level of resistance for a long trade, or the next key level of support for a short trade.
Traders should always aim for a return on investment higher than 2:1, if your Profit/Risk ratio is lower than 2:1 you may want to skip that trade or amend your Entry point in order to get a much better Profit/Risk ratio.

Our Position Size Calculator will allow you to decide if a trade is worth to take, when to enter it and what should be the right position sizing.

Summary

DBLHC patterns are great to trade, but like all price action setups and patterns, they perform better when used in conjunction with a trend or support levels, this is why using our Price action indicator and its price action filters is so important.

Moving Average Strategy

Moving Average Strategy

Charting Tools: 10,15&30-Min. Intraday charts

Technical Tools: 20& 200 period ‘simple’ moving averages.

Buy & Sell Setup: The Stock Alphabets Buy & Sell

Setup.

Long positions are favored when prices are Above their 200-MA and 20-MA on a 30-Min. chart Entry points are found on 5,10,15-Min. charts.

Short positions are favored when prices are below their 200-MA and 20-MA on a 30-Min. chart Entry points are found on 5,10,15-Min. charts.

Trading Key Reversal Bar

Trading Key Reversal Bars and How To Squeeze The Best From Them

Key reversal bars can be interpreted in many ways. Every trader has their own ideas about their significance and how they should be used. Here I’ll discuss some of the best ways to trade them, and the various patterns that you’ll see time and time again on your trading charts.

The problem with key reversal bars is they can often look very similar to an outside day, a pin candle or hammer candle. If you’re a candle watcher you’ll be familiar with those.

Identifying the significant patterns takes more than just eyeballing the formation of the bar, the ones you need to watch are the reversal bars that form at significant highs, lows, support, resistance or after a chart pattern has played out, or is about to play out.

For instance, this is a standard definition of how a key reversal bar looks, the high is above previous day high then it squeezes below the recent lows, and closes up.

If you swap this out to a candle chart display, you can see it looks much like a pin or hammer candle.

Key reversals can also look like an outside day. Here is an example as a bar.

And here is the same bar displayed as a candle, a true outside day.

So how can we define which ones will be worthy of a trade, and which ones not?

Follow on and I will show you some ideas that will help, and ways to detect them.

The Continuation of Trend Key Reversal Bar

You like trading trends? After all the trend is your friend, as they say.

Key reversal bars give you a great way to enter the trend with an obvious place for a stop, and unlimited profits if the trend is strong. That’s great risk versus reward.

In our example earlier I showed you a key reversal that was also like an outside day. This happened whilst there was a clear trend formed, and the price had stalled to consolidate for a while.

Then they key reversal bar appeared. It went up to go higher, which was rejected, then went lower, and wasn’t rejected. To enter you sell the break of the key reversal bar low the next day.

Your stop would be above the previous day high. And you can pull that down to evens when price begins to accelerate, cutting out the risk.

See this example chart.

Reversals at Support or Resistance (Swing Points)

Picking any high or low just won’t cut the mustard. You want to see these reversals either squeeze a new recent high or low that is rejected, or retest the support / resistance and fail.

Here’s some easy to understand examples, and ideas for trading them.

In this example you see on the left of the chart what is commonly referred to as a swing high. These are great patterns to watch for, as key reversal bars will often squeeze toward a swing high (or low) and get rejected as no volume is found.

You can then trade the break of the key reversal bar, moving away from the resistance or support zone. For support, the exact same method applies in reverse.

Lower Risk Trading Reversals

The above method can sometimes make the initial risk quite large. As the outside day bar (which is key) can be long.

If you identify a key reversal, one less risky way to jump on the move, and have a tighter stop is to wait for a hesitation in the trend right after the reversal.

To find those short hesitations you only need to identify an inside day or bar.

And inside day is the exact opposite to the outside day. It means the current day high and low has been within the high and low of the previous day. This signifies that the market is not sure what to do next. But you know, as well as I do, that trends will often continue.

With that in mind, you will wait for an inside day AFTER a key reversal bar, then sell the break to the direction of the trend.

Here is an example of the same key reversal bar as above, but then we wait until a small consolidation forms, look for the break of the inside day.

Conclusion.

These patterns are easy to spot once you begin to look for them. They offer plain as day places to put a stop loss, and allow you to lower your risk fast if they run in your direction right away.