Part Three — Reading the Chart
Chapter 9 — Combining Line Chart S&R and Candlestick S&R
This is the centre of the foundation. The two readings are not alternatives — they are used together, from the top down.
Illustrative example
The analytical framework
- H1, H4 and Daily — establish the structure. Use the line chart to find the settled reference prices, then candlesticks to see how price behaved there.
- Project those levels down. The same horizontal prices are carried onto the lower timeframes. You do not create new levels down there.
- M15 and M5 — observe the reaction. The lower timeframe is where you watch whether price reaches the projected level, changes direction and begins to continue.
- Entry execution concept — you act only where the higher timeframe level and the lower timeframe reaction agree.
Most retail losses come from breaking this order — finding a lower-timeframe pattern first and then hunting for a level to justify it. Reverse that habit and the quality of your trades changes immediately.
Key concepts
- Higher timeframe provides context
- Lower timeframe provides detail
- Projected levels preserve analytical order
Practical example
Mark a Daily level, refine its reaction on H1, and observe confirmation on M15.
Common mistake
Finding an M5 pattern first and searching higher timeframes for justification afterwards.
Knowledge check
Check your understanding
Reading is free.Create a free accountto save your progress and continue where you stopped.