Capturing star – worth motion sample – Analytics & Forecasts – 7 November 2023

The taking pictures star worth motion sample is a bearish sign that signifies the next chance of the market transferring decrease than larger and is used primarily in down trending markets. In essence, it’s the reverse of the hammer sample. Right here is an instance of what a taking pictures star candle appears like:

                      

A taking pictures star exhibits consumers pushing the market to a brand new excessive. Nevertheless, the consumers are usually not robust sufficient to remain on the excessive and select to bail on their positions. This causes the market to fall decrease, main sellers to additionally step into the market. The open and shut worth ranges ought to each be within the decrease half of the candle. Historically, the shut will be above the open however it’s a stronger sign if the shut is beneath the opening worth degree.

Within the above worth motion foreign exchange chart of EUR/USD, there are three examples of a taking pictures star sample – all highlighted within the gold packing containers. Via the evaluation of the open, shut, excessive and low worth ranges the sample suggests a transfer decrease is probably going. In these examples, worth did transfer decrease after the candles shaped. Once more, this isn’t assured to occur and in case you look intently you will notice examples in the identical chart the place the value didn’t transfer decrease. How might you will have traded it?

THE ENTRY: A doable worth degree to enter a commerce, might be when the market lastly manages to interrupt the low of the taking pictures star candle. The low of the third taking pictures star candle – which shaped on the week of 12 January 2020 – is 1.1086. Due to this fact, an entry worth might be 1.1085.

THE STOP-LOSS: A doable cease loss degree might be on the excessive of the taking pictures star candle. With the excessive of the taking pictures star candle at 1.1171, a doable cease loss might be 1.1173.

THE TARGET: There are a number of methods to exit a commerce in revenue comparable to exiting on the shut of a candle if the commerce is in revenue, focusing on ranges of help or resistance or utilizing trailing cease losses. On this occasion focusing on the earlier swing low degree would end in a goal worth of 1.0981.

THE TRADE: With an entry worth of 1.1085 and cease lack of 1.1173 the full danger on the commerce is 88 pips. Buying and selling at 0.1 lot would imply that if this commerce triggered the entry worth, then hit the cease loss, the general loss could be $88. On this occasion, the market traded decrease to succeed in the goal worth leading to an approximate commerce revenue of $104.

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