There are many ways of trading. Trade should be done based on candlestick chart patterns. Various charts patterns are studied before taking trade. You should try to learn those patterns practically.
One of the most famous pattern is known as open high or OH pattern. In this pattern open price equals the high price of the candle formed. You can use this pattern for both positional or intraday trading.
For positional trading we will use day time-frame as shown in the above picture. If on a day open price is the high price then we should short sell in the stock or index.
Points to remember
1. The price must open gap up on the next day the candle formed before.
2. The OH candle must not be much long.
3. The open high candle must not be formed on the lower side of the bollinger band.
I have shown one example for you. I have shown reliance candlestick chart on day time-frame. In this picture you can see open high candle on the day time-frame. After the formation of open high candle reliance has fallen more than 5 percent.
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