(7) “Candle Reverse BBMA: Kalau Salah Pahami, GAK AKAN PROFIT!” BBMA OMA ALLY

Candle Reverse and Candle Retest Explained

Introduction to the Video

• The speaker introduces the video, stating it is the seventh episode of the BBMA series aimed at beginners.

• A common question arises regarding extreme market conditions not reaching mandatory take profit (TP), highlighting a lack of understanding about candle reversals.

Importance of Candle Concepts

• The speaker emphasizes that understanding candle reverse and retest is crucial before discussing BBMA structure.

• Previous episodes have covered essential indicators and terms, but additional details are necessary for effective market entry.

Key Indicators in BBMA

• The speaker refreshes knowledge on important indicators: Bollinger Bands (BB), MA50, MA5, and MA10.

• Momentum is defined as a candlestick closing below low BB indicating a sell signal; CSAK refers to candlesticks breaking mid-BB.

Signals vs. Setups

• Signals in BBMA include MMT (momentum) and CSAK; these are not direct entry points but indicators of potential movement.

• Setups for entries include extremes when MA5 crosses BB boundaries, with specific definitions for extreme buy/sell scenarios.

Entry Strategies and Take Profit Destinations

• The concept of mandatory TP is introduced as a destination for trades initiated from extremes or MHV setups.

• Understanding where to set TP is critical; knowing target areas helps traders make informed decisions during entries.

Focus on Candle Reverse and Retest

• The discussion narrows down to two main occurrences: MHV setups and extremes requiring candle reverse analysis.

Understanding Candle Patterns in Trading

MHV Sell and Candle Reverse Concepts

• The concept of MHV (Market High Volume) sell is introduced, where candles that fail to break the top Bollinger Band (BB) are identified as potential sell signals.

• Discussion transitions to candle reverse patterns, which are defined as candles that negate the movement of previous candles. A green candle followed by a red one exemplifies this.

• An example illustrates how a red candle can signify a reversal after several consecutive green candles, marking it as a "candle reverse."

• The highest body area of the red candle is marked for placing a sell limit order, indicating strategic entry points based on reversal patterns.

• Emphasis on monitoring price action post-candle formation; prices may either drop immediately or rise before falling again.

Identifying Bullish and Bearish Reversals

• In bearish scenarios, multiple red candles can precede a small green candle, which also serves as a reversal indicator.

• The importance of recognizing when the last green candle closes above previous red ones is highlighted for setting buy limit orders.

• Clarification on target areas for trades: MHV targets mid-band levels depending on whether it's a buy or sell scenario.

• All discussions about reversals pertain specifically to MHV setups and not other trading strategies like momentum or reentry setups.

Understanding Candle Retest

• Introduction to the concept of "candle retest," which occurs after a reversal pattern has formed. This involves waiting for confirmation before entering trades.

• A visual example shows how small retracement candles following reversals can indicate potential entry points for traders.

• The significance of identifying retest locations is emphasized; these are critical for executing successful trades post-reversal confirmation.

• Traders should wait for retests before making entries; this strategy enhances trade validation and reduces risk exposure.

Practical Application with Examples

• Transitioning into practical examples using Gold Broker Oanda on an H4 timeframe helps solidify understanding of discussed concepts through real-world application.

Understanding Market Extremes and Candle Reversals

Identifying MA5 Low and Market Extremes

• The speaker introduces the concept of MA5 low, indicating its position with a red line. When a red candle appears, it signifies that the MA low has exited the lower Bollinger Band (BB), marking an extreme condition.

• An extreme is not considered valid until a reversal candle forms. The reversal candle is identified as a green candle that closes above the previous low.

Entry Strategies Based on Candle Patterns

• The target for trades initiated from extremes is set at mandatory take profit (TP) areas, specifically around MA5 and MA10 levels.

• If a buy limit order is placed below the market price but not triggered due to price movement, traders may miss entry opportunities.

Risk Management Techniques

• The speaker discusses personal risk management strategies, suggesting splitting positions into two: one for immediate entry upon confirmation of a reversal candle and another as a buy limit order below.

• This approach helps mitigate missed entries when prices retrace without hitting limit orders.

Validating Extremes with Reversal Candles

• A new extreme becomes valid only after confirming with a reversal candle in the designated area. Traders should aim for TP at mandatory levels once this validation occurs.

• If the reversal candle reaches or exceeds TP levels before entry can be made, traders may lose out on potential profits.

Practical Examples of Trading Extremes

• Real market scenarios are discussed where sometimes entries are available while other times they are not. Successful examples include identifying extremes followed by forming reversal candles.

• In instances where buy limits do not trigger, immediate market entries based on confirmed reversals can lead to successful trades targeting mandatory TP areas.

Time Frame Considerations in Trading Strategies

• The principles discussed apply across all time frames; whether using smaller or larger time frames, similar patterns will emerge.

• Specific examples illustrate how to identify extremes and reversals even in shorter time frames like M15, emphasizing consistency in trading strategies regardless of time frame used.

Understanding Market Extremes and MHV

Key Concepts of Market Extremes

• The discussion begins with the concept of market extremes, highlighting that when the MA5 high exceeds the low BB, it indicates a potential target area (TP) for traders.

• It is noted that extremes often occur before MHV (Market High Volume), suggesting a relationship between these two concepts in trading strategies.

• The speaker emphasizes that MHV typically follows an extreme TP, indicating a sequence in market behavior that traders should recognize.

Understanding MHV and Its Validation

• An example of MHV is provided where price action fails to break through the low or top BB, marking significant points for entry based on candle reversals.

• The importance of identifying candle reversals is stressed; specifically, a green candle signifies an entry point after observing an MHV setup.

Entry Strategies Based on Candle Behavior

• The goal of entering trades during an MHV setup is clarified as targeting the mid-BB area. This reinforces the need for strategic planning even when floating losses occur initially.

• A strong emphasis is placed on recognizing valid MHVs by observing wicks breaking out from BB but closing back inside, which signals strong market pressure.

Practical Application and Caution

• Traders are advised to place buy limits at specific body areas following successful identification of candle reversals to optimize their entries into trades.

• Caution is advised against immediate entries using this setup without proper understanding; patience and adherence to established SOP (Standard Operating Procedures) are recommended.

Summary of Trading Signals and Setups

• A summary highlights key trading signals: momentum and CSAK, alongside setups like extremes, MHV, and reentry strategies (RE).