Chart of D1 crude oil (left) and H4 frame (right):

Price hit support and bounced, and appeared a candle pattern at this level. However, this setup failed for 2 reasons:
  • The first reason is that the market's main trend is not an uptrend, but a downtrend. For traders to buy, we should wait for the market to break out of the downtrend, so the buyers need more time to be able to do that and attract more buyers.
  • The second reason is not tracking price action properly. After the inside bar formed on D1, the next candle is followed by an inside bar. And this double inside bar is a sign that the market is likely to continue a trend.
If the first inside bar pattern is said to be reversed, then the second inside bar will reject the signal. And the picture below is the next price movement:

Through the example above shows that price action is very powerful in analysis, it is important that you have enough patience to do this.

Lesson learned: You need to look at the large timeframe chart whether you are sure the trend will reverse or not. Try to eliminate all certainty in the transaction and consider all possible outcomes.


Below is a picture of the 2nd trade setup:

This is a trade setup that goes against the main trend. The EURUSD pair on the D1 bracket is in a downtrend and an inside bar formed. I made a small buy command when the inside bar candle formed.

However, that trading day was a thanksgiving day so the market volatility was low. There is little incentive to push prices higher.

The candle formed after the inside bar candle is a bearish pin bar candle, indicating a stronger selling motivation or less bullish momentum.

So, setting up this trade to fail is understandable.

Lesson learned: The next candlestick tells us a lot of information about the market's buying and selling pressure, affecting our decision to keep or open orders. So, we should pay attention to price action after entering the order so that we can exit in time.

Of course, in the course of trading, it is inevitable that we will make mistakes, but if we soon recognize the cause and correct it then that is really good.

The two setups above look potential but in reality, look closely at the price action they all fail. However, it is not difficult to see the cause of the failure of these two transaction setups.

No matter how old we traders are, the loss is inevitable in trading, learning to accept losses, getting wrong, and correcting in time is always what helps Traders to make a big turning point in trading. You realize this as soon as possible.