Multiple Hits Candlestick Pattern
In this post today, I am going to discuss with you a phenomenon which I call multiple hits candlestick pattern. If you take a look at your forex chart, you will see that there are times where the price will do multiple hits on a particular level but fail to break through it.
From the picture below, you can see that the price hits a particular levels for multiple times. This is because that particular level has a very strong resistance which is usually the stop loss position for other traders.
Whenever the price hits the level, it triggers several stop loss which will then pushes the price down. Another possibility will be there are traders who are waiting to enter a trade when the price hits that resistance level.
The reason why I am writing this post on this topic is because I have made this observation sometime ago regarding this pattern and I wanted you guys to also profits from it.
Most of the time when I see the mutiple hits pattern, the price will eventually get repelled by that level quite violently. Therefore I will suggest that you enter a trade based on the repulsion of those levels.
The target profits for such trades must be between 20 to 40 pips as the price may anytime reverse back to test that level again.
I hope that you enjoy this post and I will be writing more about this candlestick pattern and the psychology behind it so that you can have a better understanding of what to do when you see such pattern.