The power candle strategy is now still popular. The majority of forex traders in the world prefer to choose the technical analysis for knowing price fluctuations in the market. For them, technical analysis is considered to be more thorough in reading price movements.

Although there are many types of technical analysis, ranging from Price Action, indicators, to Fibonacci or Elliot Wave, in fact, Price Action strategy is still to be excellent. Price Action is enough to use candlestick patterns to read opportunities in the market.

However, do you know about other patterns in candlesticks called Power Candles? How did this pattern form and what was the way for trading with power candle strategy? It can be a great strategy for you. However, you must be more careful.

It is because not all positions or forms can be said as a power candle. The power candle strategy has its own unique appearance and characteristic. That is why; you have to learn more and detail about it. Here is the information.

Know the Power Candle and how it is formed

Anatomically, Power Candle does look similar to the marubozu candlestick pattern. Both are examples of single candle patterns with a long and large body. However, Power Candle is clearly different from Marubozu. Marubozu has no shadow at all, while the Power Candle has it.

To find out whether a candle is a Power Candle, consider the following characteristics. If the Close is much higher than Open, almost the same as High, and there is no long Upper Shadow, then it is called a Bullish Power Candle. This pattern marks an uptrend.

If Close is far lower than Open, almost the same as Low, and there is no long Lower Shadow, then it is called Bearish Power Candle. This pattern marks a downtrend. It is the basic pattern that you should know about the power candle strategy.

Utilizing the Power Candle to Harvest Profit

As mentioned above, you can use this Power Candle candlestick pattern to maximize the profit in the best forex broker. First, you can use Daily Time Frames. Power Candle is mostly formed from market conditions that are affected by high impact news.

That is why; it is quite risky if you are guided by low time frames. In addition, the signals generated from low time frames also often contain noise or errors. Price action traders usually trade on Daily, Weekly, or at least 4-hour time frames. 

The next way is to know the momentum when the power candle strategy appears. It can be used to predict the next price movement; whether to move according to the signal indicated by the Bullish / Bearish Power Candle, or just the opposite.

Use Stop Order to Confirm Breakout

There are 2 types of Stop Orders. Those are the Buy Stop (buy above current price) and Sell Stop (Sell below current price). You can specify a more confirmed Entry level. There are two ways that you can do due to this power candle strategy.

If you want a Buy entry from a Bullish Power Candle setup, use the High Power Candle level as a Buy Stop reference. Conversely, if you want a Sell entry from the Bearish Power Candle setup, use the Low Power Candle level as a Sell Stop reference.

Even so, you need to be careful not to get caught up in a pattern that isn't actually a Power Candle. Under certain conditions, a large body candle cannot be said to be a Power Candle. To do this strategy conveniently, join the Didimax forex broker is recommended.

It is a trusted broker that you must join to get more profit in trading. It provides complete features for traders. The deposit and withdrawal services are also really easy to do. This broker will support your power candle strategy and other plans.