Railway Track Pattern Railway track pattern
Don't know how many are known to this pattern but in my trading years i have noticed that Morning star/Evening star and railway track patterns are the most seen candle stick patterns at reversals
i personally trade this pattern in all the markets. Some even call this as order block. It doesn't matter what you name this pattern ... it works phenomenally
1. What's so special about this pattern :
This is a confluence pattern, If you get to see bullish RT in 1hr TF if could be morning star pattern in lower TF and could be a bullish pin bar in higher TF, which means you are literally covering
3 time frames in just one pattern
2. Where to identify and consider the pattern:
Majorly at support for bullish RT(Railway Track) and resistance for bearish RT could be any sort of Support Resistance and/or Pivots, look for the volumes for better confirmation.
3. Entry and Exit with SL :
One can take entry with two different ways. Aggressive and Safe entry. If you notice the chart above there is a line drawn on the RT candle mid which will
act as your entry for safe entry and SL will be the low of the
candle in bullish RT and high of the candle in bearish RT Exit will be according to your trading style and timeframe used or take confluence from other
indicators/price action
These RT candle mid will be working as Support and Resistance in future. You can see the above chart for reference.
Cons of the pattern :
The pattern works well in all the time frames yet it has its pros and cons just like any other pattern yet they seem to be more informative. once you see Bullish/Bearish RT being failed there is 70% possibility That you will get to see a move on the other side. Concept is very similar to Block order / fulfilling left over orders. Lower timeframe signals are not that reliable in some markets but can be considered if used with confluence
If the concept looks vague look at the chart above, This is just an idea, workout on the pattern and its probabilities before going live.
Note : Just for educational purpose and not a recommendation.
