What is Trend Bar?

Trend Bar candlestick is a candlestick with a real body 50% larger than the length of the whole candle.

If the Trend Bar candle closes above the opening price, it is a bullish Trend Bar candle.

If the Trend Bar candle closes below the opening price, it is a bearish Trend Bar candle.

Principle of reading Price Action with Trend Bar candles
  • Trend Bar candlesticks go in the same direction showing the strength of the market. Please note this.
  • The opposite Trend Bar candles showed a struggle between both the sellers and buyers. Find out who is the winner?
  • An isolated Trend Bar candle is often a potential trap. Is that a real trap?

We will look at two detailed examples to see how Trend Bar candles help us to understand price action.

Chart legend:
  • Blue bar chart - area with Trend Bar candles.
  • Blue circle - Trend Bar candles moving in the same direction.
  • Pink circle - opposite Trend Bar candles.
  • Green arrow - Downward Trend Bar candlesticks isolated (bull trap).
  • Red arrow - Upward Trend Bar candlestick isolated (bearish trap).
Example # 1: SPY Daily Chart

  1. A price area is having a strong tension between the two sides.
  2. The buyers are trying to push the prices up, although ineffectively.
  3. The selling faction came back stronger.
  4. After both struggles, the bulls took control.
  5. The price increased as expected.
  6. A fight where the winning side seems to be in favor of the buyers. But we do know that the bulls have not been able to win completely because the price has yet to make it to the nearby swing high.
  7. Sellers gain control.
  8. You can take a closer look at Price Action if using isolated Trend Bar candles.
Example 2: Diagram of ES in frame M5.

  1. Trading begins with a bull run.
  2. However, the price stalled as both sellers and buyers joined.
  3. The selling faction was in control, but the price force was still weak (compared to the current situation).
  4. A downside price trap. Opportunity to enter a buy order.
  5. The buyers win the fight when the price breaks out above.
  6. Prices increased stronger after each struggle.
  7. Chart sideways more after 2 times the opposite Trend Bar has appeared. Winning selling faction.
Practice reading Trend Bar candles

This approach to Price Action reading is quite simple, so you can use them in any market type and time frame.

It will take some time for you to get used to this reading, but it is not too difficult to understand. Just open past charts, try to highlight where Trend Bar candles appear, then try to analyze and predict the next price action. Tip: pay attention to the times when Trend Bar candles are opposite and compare with the situation at that time (resistance, support, trend, sideways, etc ...)

Remember that this is not a trading method. This is just one way of price action analysis, for trading, you will need more than that. A method of reading price action is not perfect, but it can get you familiar with how to read price action in the first place.