How To Trade Forex Using OHLC
OHLC is an acronym for Open High Low and Close.This is the major anatomy of a candle or bar.
The picture above shows two forex candlesticks: The green candle is a bullsih type while the red one is called bearish candle. In either cases, the OHLC is clearly labelled.
OHLC can be used to determine the intermediate market trend. Infact, some traders like me, have designed their trading system around this powerful concept.We say the market is going up if we have a higher high and higher low.
From the picture above, you`ll see that the first three green candles from the left form a series of higher highs and higher lows.If you read from the left to the right; the low of the second candle is higher than the low of the first. Similarly the low of the third candle from the left is higher than the low of the second. That is a series of higher lows. In like fashion, the high of the second candle is higher than the high of the first. Similarly the high of the third candle from the left is higher than the high of the second. That is a series of higher highs.
I personally use this method on daily chart for now. And it is profitable.Much more, it keeps me out of the market noise.Usually, I will watch out for the formation of the first HH and HL (higher high and higher low).
Then I buy the open of the next candle and set my stop loss of 50 pips.My tp is a minimum of 100 pips. At times I make 300 pips. Iam a trader of only EURUSD. I don`t know if other currency pairs equally respect this strategy like EURUSD. Hope you learn`t something today. Happy trading!
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posted by Oyewole Olatunbosun @ 03:41
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