Monday: Launch of the Challenge
Today's mission: Understanding the Morning Star and the Evening Star
Today, we're going to lay the foundations by discovering what these two Japanese candlestick patterns are, their components, and their significance in technical analysis.
Tasks to be performed :
- Reading and Podcast :
- Configure your graphics :
- Add a Japanese candlestick chart to your trading platform.
- Choose two different assets (e.g. EUR/USD and NASDAQ) and identify historical examples of these patterns.
- Observation:
- Familiarize yourself with the figure components: a large candle (bearish or bullish), a small candle indicating hesitation, and a large inverted candle validating the reversal.
Tuesday to Thursday: Analysis and Application
Three-day mission: Identify figures and develop a strategy
Tuesday: Identifying the Morning Stars and Evening Stars
Today, we're going to focus on figure detection on your graphs.
Tasks to be performed :
- Spot at least two Morning Stars on bullish assets: look for a pattern with a bearish candle, a small hesitant candle, then a bullish candle that validates the turnaround.
- Identify two Evening Stars on bearish assets: look for a bullish candle, followed by a small hesitant candle, then a bearish candle confirming the decline.
- Record your observations in a trading diary with screenshots to analyze setups.
Wednesday: Develop a strategy based on these figures
Today, you're going to develop a strategy that uses these figures as entry and exit points.
Tasks to be performed :
- Combine the Morning Star and Evening Star with support and resistance levels or indicators like the RSI to reinforce your signals.
- Draw up clear rules for entering positions: for example, wait until the close of the third candle to confirm the pattern.
- Define your stop-loss and take-profit based on figure levels.
Thursday: Backtesting your strategy
Today, we're going to test your knowledge by applying your strategy to historical data.
Tasks to be performed :
- Backtest the last 3 weeks to see how these patterns preceded major reversals.
- Analyze the trades that worked and those that failed, and note the key factors.
- Adjust your criteria if necessary to improve the accuracy of your inputs and outputs.
Friday: Final Practice
Mission for the day: Execute trades based on the Morning Star and Evening Star
Today, you're going to take action by spotting and trading these patterns on your favorite assets.
Tasks to be performed :
- Spot a Morning Star and an Evening Star in real time or on recent charts, and use them to open positions.
- Stick to your established rules, including stop-loss and take-profit to manage your risks.
- Record your observations on the evolution of each trade in your diary.
Saturday: Review and Adjustments
Today's mission: Analyze results and refine your strategy
Today, we're going to review your Friday trades to analyze what went well and what can be improved.
Tasks to be performed :
- Analyze your trades, focusing on the relevance of the patterns you've identified. Were conditions optimal?
- Identify the strengths and weaknesses of your strategy, and adjust your criteria if necessary.
Sunday: Taking stock and sharing
Today's mission: Take stock and share your results
To finish the challenge, you'll make a summary of your week and share your results with the community.
Tasks to be performed :
- Summary :
- Write a summary of your week, highlighting the most effective tricks and the results achieved.
- Think about what you can improve for your next trades.
- Share :
- Post your results and thoughts on social networks using the hashtag #xenesy and tagging @xenesy_project. Chat with other participants to exchange ideas and strategies.
Conclusion
This challenge on the Morning and Evening Stars has enabled you to develop an in-depth understanding of reversal patterns and their application in your trading strategies. These tools, when mastered, can dramatically improve your trading performance.
Good luck to you all, and see you soon for a new trading challenge on the financial markets!
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