How to understand big shadows in trading charts ?

A very simple method for exiting the big shadow is to simply place a take-profit target at the nearest zone. For bullish big shadows this would mean placing a profit target a few pips below the nearest resistance zone, and for bearish big shadows that would mean placing a profit target a few pips above the nearest support zone

THE RULES

The big-shadow trade is easy to identify, and it often signals a critical turning point in the market. Here are the rules associated with the big shadow trade:

• 1.Big shadows are two-candlestick formations.
• 2.The second candlestick of the formation is the big-shadow candlestick.
• 3.The big-shadow candlestick has a higher high and a lower low than the previous candlestick.
• 4.Big shadows must print on the zones.
• 5.Big shadows print at extreme highs or extreme lows. the low.
• 7.Bullish big-shadow candlesticks have a closing price near the high.
• 8.Big-shadow candlesticks have wider ranges than the nearby candlesticks.
• 9.For bullish big shadows, the stop loss is placed a few pips below the low of the big-shadow candlestick.
• 10. For bearish big shadows, the stop loss is placed a few pips above the high of the big-shadow candlestick.
• 11.The very best big-shadow candlesticks have room to the left.

There are also several optimal characteristics that the best big shadows share; these features include:

• 1.The two-candlestick formation prints at an extreme high or low on the chart where the market has not traded in at least seven candlesticks.
• 2.The big-shadow candlestick has a greater range than the previous 10 candlesticks.
• 3.For bullish big shadows, the candlestick following the bullish big shadow triggers the buy stop order placed above the high of the big-shadow candlestick.
• 4.For bearish big shadows, the candlestick following the bearish big shadow triggers the sell stop order placed below the low of the bigshadow candlestick.
• 5.For bullish big shadows, the closing price for the big-shadow candlestickis within a few pips of the high.
• 6.For bearish big shadows, the closing price for the big-shadow candlestick is within a fewpips of the low.

Many traders do extremely well trading only the big-shadow trade. If you would like to become an expert with this trading system, spend time testing it so that you get comfortable trading big shadows. If you would like to follow along with live big-shadow trades.