Hi, I want to make a note for my own trading strategy. I want to show you how to utilize a long tail candle reversal strategy. I use fibonacci breakout to measure and to define the proft target using this signal.
This strategy is based on a long wick candle. The candle must be long or big enough and has a long tail. At least the tail must be 50:50 or longer compared to the body. See the example below
See how NZDUSD H1 time frame move higher since the early morning of the day. Until we spot a big bullish candle with a long tail.
Next, draw the fibonacci retracement tool from the low of the candle to the high of the candle. We open SELL when price break the level 100 fibonacci or break the low of the long wick candle. The target should be tight enough at Fibonacci level 161.8, not more.
Please note that this big candle must stand out from other previous candle. If there are higher candles before it, ignore it.