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The FX Bootcamp Guide to Strategic and Tactical Forex Trading by Wayne McDonell

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PART FOUR SUMMARY

To recap, following are the key takeaways for Part Four:
• Candlesticks are signs of trader behavior.
• Some candlesticks appear on their own.
• Others join together to form patterns.
• Doji and spinning tops show exhaustion.
• Combined with other larger candles, they can form star reversal patterns.
• Top and crown patterns are also reversal signs.
• Such patterns need a strong trend behind them or there is nothing to reverse.
• Candles can also show trend continuation.
• The key to continuation or reversals is support and resistance.
• Price often breaks, rallies, exhausts, and then reverses over time.
• To measure price action vs. support or resistance, use an oscillator.
• Divergence and reversal patterns decrease the chances of a new breakout.
• News trading has unique risks associated with it. It is best to avoid trading just before or after the news is released.
• Use the news spike to identify a line in the sand to use in your news trading.
• Ignore news-trade-related reversals.
• The bigger the news results, the more aggressive your trade plan can be.
• You may conservatively trade breakouts.
• You may aggressively trade news pullbacks.
• Pullbacks often return at Bollinger bands, moving averages or Fibonacci levels.
• Watch at least two time frames, such as a 15-minute and a 1-minute chart.

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