7-Day Trading Challenge: Japanese Candlestick Analysis Challenge (Candlesticks)

Monday: Launch of the Challenge

Today's mission: Understanding Japanese candles
Today, we start by understanding what Japanese candlesticks are, their structure and the information they give us on price action. Understanding these candles will enable you to grasp the psychology of the market and improve your trading decisions.

Tasks to be performed :

• Playback and Video :
  • Read a detailed article on the formation and interpretation of Japanese candles. Learn to identify different candles such as the Doji, Hammer, Reverse Hammer and Engulfing.
  • Listen to our podcast which explains how to use Japanese candlesticks in trading to identify trend reversals and continuations.

Recommended resources :

• Article : A complete guide to Japanese candles and their interpretation.

• Podcast: How to use Japanese candles to make trading decisions.

• Configuring your chart :

  • Add a Japanese candlestick chart to your trading platform (MT4, TradingView, etc.).
  • Adjust the parameters to get used to observing candle formations over different periods (H1, H4, D1).

• Observation:

  • Choose two assets (for example, EUR/USD and the DAX index) and observe the candlestick formations over different periods. Note any interesting candlestick patterns.

Tuesday to Thursday: Analysis and Strategy

Three-day mission: Develop and test your strategy with Japanese candles

Tuesday: Identifying key candle formations

Today, we're going to focus on identifying key Japanese candlestick formations that indicate a trend reversal or continuation.

Tasks to be performed :

• Identify different candle formations, such as Doji, Engulfing, or Hammers.
• Note the configurations that occur near support or resistance levels, as they are often reversal signals.

Wednesday: Candlestick trading strategy

Today, we're going to test how candle formations can be used to enter and exit the market.

Tasks to be performed :

• Spot trading opportunities based on Japanese candles, especially those that signal reversals (for example, a bullish Engulfing after a bearish trend).
• Identify two trading opportunities: one bullish (e.g. hammer near support) and one bearish (e.g. bearish engulfing near resistance).

Thursday: Backtesting and adjusting your strategy

Today, we're going to test your knowledge by backtesting on historical data, to see how your candlestick-based strategies would have performed.

Tasks to be performed :

• Backtest the last few weeks by analyzing candle formations and applying your strategies.
• Test different entry and exit strategies based on specific candlesticks.
• Adjust your strategy according to the results of backtesting, such as adjusting your entry or exit criteria.

Friday: Practice

Today's mission: Execute your trades based on Japanese candlesticks
Today, you'll put your knowledge of Japanese candlesticks into practice by placing real trades or demo accounts.

Tasks to be performed :

• Place real or demo trades using Japanese candlestick formations as entry and exit points.

• Use a stop-loss and take-profit based on the support and resistance levels associated with the candlestick formations.

• Make a note of your reasons for entry and exit, as well as the evolution of your trade.

• Trading Journal :

  • Keep a trading diary where you note the reasons for your entry and exit based on candle formations, as well as the results obtained.

Saturday: Review and Adjustments

Today's mission: Analyze results and adjust your strategy
Today, we'll be analyzing the trades you made on Friday and making adjustments to improve your future performance.

Tasks to be performed :

• Review your Friday trades and analyze whether you correctly used the candle formations to enter and exit the market.

• Identify what has worked well and what can be improved, taking into account the mistakes or good choices you've made.

• Adjustments :

  • Adjust your strategy according to the results of Friday's trades. Test adjustments such as changing your risk management or adjusting your entry and exit points.

Sunday: Taking stock and sharing

Today's mission: Take stock and share your results
It's the last day of the challenge, an opportunity to recap your trading week and share your results with the community.

Tasks to be performed :

• Summary :

  • Write up a summary of your week. What objectives did you achieve? Which candle formations were most effective for you?
  • Think about what you can improve for your next trading challenges.

• Share :

  • Share your results and thoughts on social networks. Use the hashtag #xenesy and tag @xenesy_project in your posts.
  • Encourage others to share their experiences and discuss the candle formations they've found most useful.

Conclusion

Japanese candlesticks offer a powerful method for understanding market psychology and making more informed decisions in your trades. This challenge has enabled you to discover how this training can be used to identify profitable trading opportunities. Keep practicing and honing your skills to improve your trading results.

Good luck to you all, and see you soon on the markets!