Educational content only. Not financial advice. Markets involve risk. Trade responsibly.
If you're searching for candlesticks, this guide gives you a rules-based framework you can actually execute. We'll cover the core concepts, step-by-step rules, and the mistakes that cost traders money—especially in Indian markets.
Keyword focus: candlesticks. Also covers: candlesticks, fakeouts, price action, breakouts.
Key takeaways
A simple framework you can repeat daily (structure → zone → setup → risk).
How to avoid the most common retail traps (chasing, overtrading, weak levels).
Clear definitions for entries, invalidation (stops), and basic trade management.
A checklist you can copy into your trading journal or notes.
FAQ answers for the most searched beginner doubts.
Table of contents
Who this is for (and what you need before you start)
Core concept explained simply
Step-by-step rules (setup → entry → stop → management)
Examples and practical notes (Indian market context)
Mistakes to avoid
Checklist + FAQ + next steps
Who this is for (and prerequisites)
This is for beginners to intermediate traders who want a repeatable process. You do not need fancy indicators. You do need: a watchlist of liquid stocks, a timeframe to focus on, and a fixed risk rule.
Timeframes: Daily + 4H for swing; 15m + 5m for intraday (choose one style).
Watchlist: stick to liquid names to reduce slippage and random spikes.
Risk rule: decide your 1R (fixed ₹ or %). Never increase size to “recover”.
Core concept (explained simply)
Most strategies fail because traders enter without context. Context means: market regime (trend/range), decision zones (where price historically reacts), and invalidation (where your idea is wrong).
When you align these three, trades become fewer but higher quality—better for consistent execution and SEO-friendly clarity.
Step-by-step execution framework
Step 1: Identify regime
Trend: trade pullbacks and breakout-retests, not random reversals.
Range: trade edges (support/resistance), avoid the middle.
Transition: reduce size or skip (this is where fakeouts live).
Step 2: Mark decision zones
Use Daily/Weekly to mark 3–7 zones. Zones are areas—not single-price laser lines. A level is stronger when it caused a fast move and was respected multiple times.
Step 3: Choose one setup
Breakout + retest (best for avoiding chase entries).
Pullback to structure (best for trend continuation).
Range edge trade (best for sideways markets).
Step 4: Define invalidation and size the trade
Your stop should sit at invalidation—not at a random percentage. If the structure-based stop is too wide, reduce your position size or skip the trade.
Step 5: Manage the trade (simple rules)
Don’t move stops farther. Only tighten logically (structure-based).
If price moves 1R in your favor, consider reducing risk (optional).
Avoid “hoping” near major resistance; plan partials or a trail rule.
Common mistakes (and how to fix them)
Chasing big candles → Wait for retest/confirmation.
Trading mid-range noise → Trade only at zones.
Random stop placement → Use invalidation-based stops.
Too many setups → Master one setup first.
No review loop → Journal outcomes in R (risk units).
Checklist (copy/paste)
Regime today: trend / range / transition?
Key zones marked (3–7)?
Setup selected (one)?
Entry trigger clearly defined?
Invalidation level defined?
Risk fixed (1R) and position size calculated?
If trade fails, will I follow my daily max loss rule?
FAQ
Is this suitable for beginners?
Yes—because it focuses on process, risk, and clarity. Start with smaller size and fewer trades.
Which timeframe works best?
For most beginners: Daily + 4H to reduce noise. For intraday: use a higher timeframe for zones and a lower timeframe for triggers.
How many trades should I take per day/week?
Limit trades until you’re profitable. Quality > quantity. Many traders do best with 1–3 high-quality setups per week.
What’s the fastest way to improve?
Journal every trade, tag mistakes, and remove one mistake per week. The compounding is real.
Related (internal links)
Risk Management (1R, sizing): /guides/risk-management-trading-position-sizing-1r-drawdowns
Trading Journal Template: /guides/trading-journal-template-what-to-track-examples
Daily Market Prep Checklist: /articles/daily-market-prep-checklist-indian-markets