Sorry for rubbish writing on picture.
But i have often looked at forex markets and im amazed at how often the price comes back to test price levels. I been looking for method to take advantage of this. Its possible i have found a solution. This is not complete system by any means. Its more an observation and appreciate any comments on this.
Idea is to look for a long shadows on 5 min chart (im using Eur/Usd) and then look for price to trade in oppisite direction to shadow. I toying with idea of lenght of the actual candle been roughly distance price will moves about from shadow candle before entering and set take profit, again at lenght of candle. And Stop loss at lenght of candle.
Example
Eur/Usd on 5 mins chart produce a shadow candle opened at 14100 went up to 14120 closed at 14105. Next candle open at 14104 traded down all way to 14087 (17 pips) roughly near our lenght of previous shadow candle so we take position long for 20 pips at 14087 stop lost = 20 pips, looking for retest of shadow candle.
I have included a picture of todays Eur/Usd what i mean i highlighted the candles. This seems to happen over and over again. Maybe someone clarify this and im not just seeing what i want to see. Thanks
