We all know that the market does not move in one straight line. You can notice that it’s a pattern of upward and downward movement. You can classify this pattern as:
- Trending Move
- Retracement Move
Let us further discuss this movements in the market and use it to our advantage.
In a trending move, you will notice that larger bodies of candles are formed in the direction corelated to the trend. It signifies the “stronger” leg of the trend.
Here is an example of a trending move in the AUD/NZD H4 chart:
In a retracement move, you will notice small bodied candles that moves against the trend. It is the “Weaker” leg of the trend.
Here is an example of a retracement move in the AUD/NZD H4 chart: