Are you aware of the Big Shadow Setup in Forex trading? This is an important catalyst for the naked trader. It is a two-candlestick, reversal formation. In forex trading the big shadow appears on or near the support and resistance zones. This is exactly the point where the naked trader is on the lookout for high probability trade Set up. Once the big shadow plays it role out it is a valuable hint that the market may soon turn around.
What the Big Shadow is?
In forex trading the big shadow is a typical type of candle stick formation which happens when the second candle stick totally dwarfs the first one. The second big candle stick in this type of candle stick formation is known to be the big shadow candle stick.
The bullet points to identify a big shadow candle stick:
The stop loss is an important element which provides protection to the forex trader. So you must always know where to put the Stop loss for any of your trades. In case of the Big Shadow Set up the Stop loss is to be placed beyond the big shadow. If it is a bullish trade then the Stop loss is to be put just a few pips below the low of the big shadow candle stick. On the other hand if it is a bearish scenario then you need to put the Stop loss a few pips above the high of the high end of the big shadow candle stick.
Entering the trade:
Once you have identified the Big Shadow candle stick the safest way to enter the trade to benefit is to wait for the market to move into the direction which is expected. This means that you buy in case when you have a bullish shadow and sell when you have the bearish shadows. You have to have the Stop losses accordingly as mentioned above and wait till you make the maximum profits.
What the Big Shadow is?
In forex trading the big shadow is a typical type of candle stick formation which happens when the second candle stick totally dwarfs the first one. The second big candle stick in this type of candle stick formation is known to be the big shadow candle stick.
The bullet points to identify a big shadow candle stick:
- The big shadow candle stick is much larger in comparison to the immediate previous candle stick
- This candle stick has a very large range
- It is the candle stick which the market might not have seen over some period of time.
- Ideally the Big Shadow stick should have the greatest range of the 5 precious candle sticks.
The stop loss is an important element which provides protection to the forex trader. So you must always know where to put the Stop loss for any of your trades. In case of the Big Shadow Set up the Stop loss is to be placed beyond the big shadow. If it is a bullish trade then the Stop loss is to be put just a few pips below the low of the big shadow candle stick. On the other hand if it is a bearish scenario then you need to put the Stop loss a few pips above the high of the high end of the big shadow candle stick.
Entering the trade:
Once you have identified the Big Shadow candle stick the safest way to enter the trade to benefit is to wait for the market to move into the direction which is expected. This means that you buy in case when you have a bullish shadow and sell when you have the bearish shadows. You have to have the Stop losses accordingly as mentioned above and wait till you make the maximum profits.
