EURUSD Showing A Long Legged Doji On Weekly Chart

Long Legged Doji is an important candlestick pattern. In our experience when we found a long legged doji on any timeframe there was a trend reversal and big move. Did you read the post on how to make 1000 pips in a month with a small 20 pips stop loss? Candlestick patterns are important trend reversal and trend continuation signals. Take a look at the following screenshot that shows a long legged doji being formed on the weekly chart.

'EURUSD

In the above screenshot, just below the red arrow you can see the long legged doji that has been formed this week by EURUSD. The open for the week was 1.05921 and the close was 1.05910. So the open and close have only a 1 pip difference. This is a perfect long legged doji pattern. There is a big upper shadow and a big lower shadow. You can join our Million Dollar Trading Challenge.

As said above in the beginning,  a long legged doji pattern can mean a short term or a long term trend reversal. We will see next week how this happens. Candlestick patterns on weekly chart are very strong signals as compared to those on daily and H4 charts. Did you check our Million Dollar Trading Challenge II?When you are trading, risk management is the most important thing. There should be no knee jerk trades. Make sure you read the charts correctly and first determine the trend direction correctly. Once you have the trend direction, you should look for a low risk entry. Read the post that explains how you can make 100-200 pips with a small 10-20 pips stop loss.

EURUSD Forming W Pattern Also Known As Double Bottom Pattern

Did you see another thing in the above chart? A Double Bottom Pattern also known as the W pattern has been formed. Just one year back, EURUSD had found support at 1.05202. Now exactly after 12 months, it is again forming a long legged doji with the low at 1.05183. A W pattern also known as the Double Bottom pattern also is a strong trend reversal signal. Since these patterns have been formed on the weekly chart, this can be a big move. EURUSD can find resistance between 1.12000 and 1.13000 in the next few months. Did you check our Million Dollar Trading Challenge EA?

Double Bottom Pattern is an important pattern that works on all timeframes from M1, M5, M15, M30, H1, H4, D1 and W1. The higher the timeframe the bigger the move. On M1, a double bottom pattern can mean a 20-30 pips move. On H4, it can mean 200-400 pips move and on weekly it can mean 500-1000 pips move. As said above we expect EURUSD to find resistance between 1.1200 and 1.1300 this makes a move of 800-1000 pips.

Now this is how we determine the trend direction. Next week we will look for a buy trade. We will use H4 chart to find a low risk entry. If you have been reading our posts, you will be knowing by now that we look for low risk entries with stop loss between 10-20 pips. Always use pending orders. This will help you lower the risk considerably plus free you from the task of looking at the charts continuously. How do you do it? We do it by analyzing the charts correctly and then setting pending orders.

If the pending order gets filled, you enter into a trade. If it doesn’t get filled, don’t worry. We will look for a second entry with a new pending order. But never increase stop loss greater than 20 pips. 20 pips doesn’t mean that you should risk 5% on the trade. You should never risk more than 2% on a single trade. This rule should also be written in stone in your book of trading rules.

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