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As a follower of PipHut you have probably seen us write our targets like this:

“Targets at 20/25/30/25 pips for 100 pips profit”.

What does this mean? This means that Target 1 is at 20 pips, Target 2 is at 45 pips, Target 3 is at 75 pips and Target 4 is at 100 pips. We give targets this way because trending S/R levels will rise or fall throwing off any exact prices we give. For example, if today’s signal said:

“We are looking for a break of rising trend support (currently at 1.3500 and rising)”

If we listed out the exact price levels it would look something like this: “with targets at 1.3480, 1.3455, 1.3425 and 1.3400“.

However since rising support, well, rises, after the current candle closes the support would no longer be at 1.3500 – it would be at something like 1.3515 – and the TP levels we listed would no longer be valid or make any sense. To get around this problem we list our TP levels as pip increments. For example: “with targets at 20/25/30/25 pips” would mean targets are at 1.3480, 1.3455, 1.3425 and 1.3400 when support at 1.3500 is broken (1.3500 – 20 pips = TP1, T1 – 25 pips = TP2, etc.). When the candle closed and support rose we would simply subtract the new levels from the new support price. For example if support were at 1.3515 now targets would be 1.3495, 1.3470, 1.3440 and 1.3415 (1.3515 – 20 pips = T1, etc).

How do you know where the support and resistance levels are if they are always rising and falling?

If you are a PRO user this is easy – you can view our charts for each pair, freshly updated every 10 minutes. You will also receive email alerts whenever a S/R level is broken or bounced off of.

If you are a free user it is a bit more challenging – if you are looking to emulate our support and resistance levels then you will a) only have access to the free EUR/USD chart (instead of the 5 pairs PRO users have access to) and b) you will have to try and draw our S/R lines on your charts by hand.

Gaps occur in trading when the open price of a candle occurs below or above the close price of the previous candle. In less liquid markets like stocks gaps can occur constantly throughout the trading day, but in the forex markets where trillions of dollars exchanges hands every day we usually only see gaps after the long weekend break, shown below:

It is commonly believed by many traders that “all gaps close” or that a pair will always “close the gap” within a few days of occurring - while we have observed this to be true many times we have seen no studies that scientifically demonstrate that this is the case.

Flag patterns are a reliable continuation pattern that is characterized by two parallel lines (i.e. a channel) that goes against the trend, and is preceded by a large drop or rise which is commonly referred to as a “flag pole”.

In the example below we see a strong bearish flag pole, followed by a bullish channel with two parallel lines which make our flag pattern:

There is no reliable data out there on how many traders use which time zones, but many large institutions use UTC time even though a good number are located in the US East Coast time zone.

A ‘false signal’ in trading is any trading signal that does not result in the expected or desired outcome. So, for example, a bullish doji that does not result in a bullish reversal.

To effectively trade false signals using candlesticks one has to have accurate backtesting data of candlesticks to know which candles will result in the desired result and which won’For example in backtesting if, for example the historical data given to us using the Backtesting portion of CandlePRO. For example in backtesting if you see a TP/SL that has a win % under 50% that tells us that TP/SL combination loses more often than it wins, so a trade in the opposite direction as forecast will win more often that it loses. So a TP/SL with a win % of 20% in backtesting would have a win % of 80% if taken in the opposite direction.

A ‘descending triangle’ is a bearish continuation pattern and consolidation pattern that indicates the price will continue in the direction of the previous trend. It often times accompanies a flag pole formation. Shown in blue lines on chart below, in a descending triangle the top resistance is a downward sloping trend line, indicating that selling pressure is increasing on each rally, while bottom support is horizontal. Descending triangles are bearish signals on breaks of bottom support.

An ‘ascending wedge’ is a bullish continuation pattern that is formed when both the top resistance line and bottom support of the consolidation pattern slope upward as in the example below. Ascending wedges are very similar to ascending triangles – the main difference being that in an ascending triangle the top support is a horizontal line and does not slope upward.

A forex continuation pattern is any chart consolidation pattern (triangle, wedge, flag, etc) that indicates the price will continue in the direction of the trend.

Introduction

I had planned on releasing the Support/Resistance article this week (as per the Training Schedule for October 1st), but I have a surprise for you that is well-worth the wait: a new strategy BUILT-IN to CandlePro AND this article on how to use that feature in your trading! It is a 2-for-1 :).

What is the Double/Triple Strategy?

The Double/Triple strategy is a confluence-based strategy that looks for multiple candles in the same timeframe that all point in the same direction. For example if there is a BULLISH Doji on the 15m EUR/USD and a BULLISH Hammer on the 15 AUD/USD. A triple is when the EUR/USD, AUD/USD and GBP/USD all line up together and are considered stronger than a double.

How do I detect new Double/Triple signals with CandlePro?

Great question! Detecting new double/triple signals with CandlePro is easy – just search for new candles like you normally would and any double or triple signal will be noted with this symbol:

Here we can see an example of a double EUR/USD and GBP/USD symbol:

What are the entry and exit rules for this strategy?

These are basic rules. Adapt as you see fit for your trading strategy and other factors such as trend, quality of signal, etc.

1) Enter trade in the direction of the signals

2) Place stops at least as far away as the CandlePro recommend Min SL found on the Performance Report

3) Have tiers of targets with the 1st target equal distance with the SL or at the Max recommend TP level (in Performance Report) – whichever is closer. At this level you can either take profit if you are scalping OR move SL to break-even to eliminate risk in the trade. Place 2 more targets at appropriate S/R levels, and at each target move your SL up to the previous target level (so for example at T2 I would move my SL to T1).

Note: The best results always come from looking at the charts and using support/resistance levels that make sense, but for those that want a more cookie-cutter approach these are the steps I recommend.

Three Tips for Better Performance

1) EU+GU doubles are better performers. The system is setup to detect a double on EU+GU, EU+AU or AU+GU, BUT not all of these combinations are created equally. By far and away the EU+GU signals are the most powerful, representing much more volume than any AU combination. That doesn’t mean you can’t trade an AU double – it just means the setup (including trend, price action, etc) has to be cleaner than an EU+GU setup.

2) A triple should be viewed as an EU+GU with a AU as a kicker (in poker a ‘kicker’ is a side card that breaks ties between competing hands). That means trade the EU+GU as the primary, AU is extra confirmation and an AU trade should be taken based on the chart.

3) As with everything in forex looking for more confluence – rejection or breakouts of support/resistance, trade with the trend, look at different timeframes, look for signals with good RR ratios. In the FX markets every little drop helps. Remember, it is all about stacking the odds in your favor.

Trade Examples

Rather than re-invent the wheel here with trade examples I’m going to point you to Neil’s (@ukfitness) CP blog where he has been successfully using this strategy for almost 2 months now. Great job to Neil for keeping such a good trade journal and for identifying a winning strategy.

Click here to go to the journal.

Conclusion

Doubles and triples are powerful cross-pair signals that work because they reflect underlying shifts in currencies. Combining them with forex fundamentals such as money management and trend trading are yet another way CandlePro will help you improve your trading.

I’m proud to roll out a few new services for PipHutters today, services that I think you will find extremely useful to help you trade better. Some of these services you may have noticed recently, others I bet you have not…

By far the most exciting of the new announcements, welcome the Candlestick Alert Service! No matter how good a trader you are sometimes you miss candlestick signals. The best of us do it. Not anymore!

What this little gem does is monitor the 30m and 1h charts of the EUR/USD and show you if any bullish or bearish candlestick signals have been detected! Now this is still in BETA, so I want to remind people that the presentation might still be a little rough around the edges but that is what I need your feedback for!

Right now the service will only detect candlesticks on the 30m and 1h of the EURUSD and I’m starting with only the doji, shooting star, hammer, inverted hammer and hanging man. Once I’m sure it is detecting those properly I will begin to roll out other patterns as well..

Click here to visit the Candlestick Alert Service

What could go better with the Candlestick Alert Service than a Candlestick Quick Reference guide? Not much! This is pretty short right now, because I wanted to only display candles that the alert service is currently detecting (see above for list). But on the quick reference guide if you click on the image or name of any candle it will bring you to a more detailed page.

Click here to visit the Candlestick Reference Guide.

I’ve had quite a few people ask me recently for a forex market hours tool, to see what markets are open and closed. Ask and you shall receive! Pretty self-explanatory. Check it out.

Click here to visit the Forex Market Hours page.

Yes, I know PipHut already had forums but, to be honest, I hated them. They were clunky, looked bad, were hard to navigate. I think these new forums (hopefully you agree) will be much easier for everyone to use. I know that the comments section of the posts are easier (and in many cases better) for discussing the day’s trading, but there are some things much easily discussed in a forum, such as trading systems that you can refer back to, ongoing conversations about a news event, commodities, OR if you want to post a chart or keep a journal thread going.

By the way, if you start a thread and aren’t getting much traction just let me know, I’ll post a link to it front and center on the main site and give you plenty of traffic.

Click here to visit the Candlestick Reference Guide.