Range Breakdown / Red candle breakdown Strategy

Where to use:
1. Big Red candle should form at the top of upper trend may be bearish
engulfing
2. We can use it while break a range [it may be in downside]
3. We can use it after green candle if immediate red candle form.
4. We will use this if there is no near support level
To get a good reward

How to enter:
1. If price open flat and not break the low then we will wait for 1st
upside retracement to trap the buyer
2. After 1st retracement if we get selling candle like DOJI/inverted
hammer/ hanging man then we will sell there.
3. If no such candlestick form then we will wait for the price action.
4. Stop loss will be the high of the selling candle
5. Target will be at least 1:2 and 1:3
6. If price open big gap up then we will see a quick selling in 1st 1-2
candle. We will enter after price action break.
7. If price open big gap down then no entry – but we may see a
upside price movement due to profit booking

Where not to enter:

If price rejection happen in 1st candle from lower
side after hitting the target, it means price can
reverse to upside as it took support near support
level and reverse from there
 Let’s see the practical:
7.10.2020: Here price open flat
13.8.2020: Price open gap up
9.7.2020: price open gap down:
26.8.2020: after green near support immediate
selling candle
Caution:
5.10.2020Target done by 1st 5min candle and
create price rejection then no entry
Example:
BEML:

Bajaj Auto:
 INDEX CHART ANALYSIS
16.1.2017:
20.3.2017:
21.3.2017:
Opening little flat

Price action in 5 min chart:

Shooting Star in 15 min:
13.4.2017:
12.5.2017:
23.5.2017:
24.5.2017:
7.6.2017:
3.8.2017:
 How to trade next day after a big red candle
formation at the top:
 What is the logic:
 How chart form next day
 How to trade

Logic:
While a big negative candle form it means in every swing there is
seller. So while price try to move upside it will hit seller in every
move. It means it’s difficult to clear all those swing resistance in one
go.
1. So, if open big gap up seller will try to save there stop loss and
from stating selling will occur and it reached to the low of the
previous red candle.
2. If open little gap up sometimes by creating price action /
candlestick its fall up to the low of the previous red candle and
after that buyer started to accumulate so price stats moving
upper side.
3. If open flat and 1st half it’s crossing the low then in 2nd half it
will reverse due to profit booking
4. If open big gap down then 1st profit booking come up to the
low of the previous red candle and from this position its
reverse to the lower side.

What kind of chart we see in next day:

Most of cases we see a doji candle may be in
green/red color.
How to trade:
1. if open big gap up then by seeing candlestick and price action
we can sell index fut/stock to the low of the previous red
candle.
2. if open flat then we can see a fall upto the low of the previous
red candle and from there buyer started accumulating there
position so we can sell PE option.
3. If open gap down then 1st we will wait for a retracement to the
low of the previous red candle and from there by seeing
candlestick , price action or trend line we can sell CE.

Or you can make a short straddle in option.

17.8.2020:
1.9.2020:
16.10.2020: