What is a Significant Candle? And How to Trade It?

One of the most important elements in trading is looking for significant moves, we all know it is important and many of us strive for answers.. The answer is candles and what do i mean by candles, i mean significant candles. It is easy to look at a chart and guess the next move but what if there was a way to have an edge of say over 75% success..?

…You would be saying tell me, tell me, please..

Well, let me reveal to you a secret in Forex, look for significant candles! Simple strategy that works time and time again.

What do I mean by this..? Well look for strong engulfing candles, that is what i commonly refer to as a “significant candle”. ( Hard to explain exactly I know, so look below.. )

significant buy candle

Above – I demonstrate an example of a bullish engulfing significant candle.

significant sell candle

Above – I demonstrate an example of a Bearish engulfing significant candle. The read line is where to place a stop loss..

Now I am sure you are still wondering what I mean by this type of candle, all i can say is this type of candle is an interpretation of order flow and these types of candles indicate significant changes by big buyers or by the big sellers. It does happen, however it is a rare case that after a significant candle move that the price does not keep going in that direction.

Above – In the video above I explain it in detail plus as a bonus I show you how to trade it when in an area on the chart where I cannot see what is ahead on the charts. This shows not only that it is a good strategy, but also that it is a highly profitable one as well.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.


  1. Hi Tim

    What EA would you use to for the stops or would you have to set the stops manualy and for the amout in the stop to only use 2% of your account as an example.



    • Hey Edgar,

      With stops they are different on every trade depending on signal.. After the signal place the stop below signal or below previous low giving it a bit of room below.. At a support area place below support with a bit of room..

      The 2% rule is money management which is not so much about stops, moreso about how much you want to risk.. A stop could be 100 pips or even 10 pips and be 2%, it is your preference.. Many traders prefer 1% on a single trade.. However, that choice is up to your tolerance of risk..

      So, I do not use EAs for stops, however I do use an EA for break even.. The EA pulls the stop up to be at a set amount of pips on a trade.. Each trade is different on this as well depending on when next structure is.. Structure is what the market respects so we have to adjust to each different structure for each trade.. If engulfing candles one can also just pull stop manually below each new candle close while the momentum lasts.. Then when finally the momentum ends it breaks the low of the last engulfing candle signifying a retracement of some type the trade will close.. This style involves watching for each candle close though..


  2. Love your site!!! Do you consider an engulfing candle when the candle engulfs the body of the previous candle or both the previous Hi and Low?


    • Hey Kent,
      Yeah body and wicks engulfed is best, but the body is most important part to be bigger to me..
      With your high or low question, the high is what is important to be higher, the low engulfed less important..

      audjpy engulfings


      Above is some examples on AUDJPY that are valid signals at where price was on that pair.. Once you start looking for valid engulfing signals you will literally start seeing them everywhere.. This is the majority of the signals i take, however like i said it depends on where price is as well in analysis..


  3. Hi Timon,
    Many thanks for sharing a lot. Have been on your site in the last five hours,I am very glad I came across. Please just a question or clarification on significant candle,do trade only 15mins time frame only. Can you trade on 1hour chart/ 4hour chart.

    • @Rufus – Glad my site is helping..

      With Significant Candles it works on all time frames. The 15 minute is just a good example of this as that time frame generally offers really good risk reward. I do however use on all time frames including the weekly charts.


  4. Hello Tim,
    your videos on forex trading are fantastic!

    Hv a query. In the daily alert candle video u say u place an entry order 9 pips above/below alert candle. Wid this b 9 pips above the high or close of the entry candle?


  5. Hi Tim,
    Well done it is another great video, precise elaboration.

  6. Hey Timon,

    Thanks for the video! I have a question. In the video you mention you’ll be doing a live trading and record it. i was just wondering if you have already done that.


    • Hey Mike,
      I have a few recorded live trades recorded but have not released them just yet online, when released will keep you all updated. Plan on doing more in future as well.


  7. Hi Timon,

    Your videos are really amazing, i have learned lot of things from you. One step ahead in my trading. Feeling Happy Timon. I need your ideas regarding the gap trading which happens for each week and what are the pairs that can be traded for gap trading..

  8. Guenter says:

    Hi Timon,

    sorry for my bad English, I translated it with google.
    Thanks for the videos, I’ve learned a lot from it. For the live trading videos I would also be interested.
    One question : What are the liquid currency pairs where I can apply this strategy?
    Thank you very much

    • Thanks for the comment Guenter,
      Any pair is fine, however certain pairs are better than others such as EURAUD or GBPAUD if you ask me. Both good trending and price action pairs.

  9. Hi Timon,

    This is great stuff. My question is… I trade the e mini s&p What time frame are you trading? 5,15 or 30 min candle? What time frame seems to be the most profitable for you? Also, will this work on the s&p?


    • Hey Brent,
      I trade mainly the daily charts / weekly charts at the moment as they take little screen time for analysis each day however this is for a 15 minute example in the video above. 15 minute trading being more so day trading perspective of momentum based moves.
      When I day trade however the 15 minute and 1 hour is the time frames I use. 😉


  10. Nick Luebcke says:

    Please clarify. We can open a 2nd live trade if the move prevails once 1st trade is at break even and we have distance to S/R levels. If we get an opposite entry signal before 1st trade is finished, do we close 1st trade and take the opposite entry or open both?

    • Hey Nick,
      Depends on the flow of the market with that one. To trade effectively with the trend and how the market moves I would recommend checking out my recent series on Trends which will help you work out where to add to positions, when to hold or exit based on market moves.

      To find out more – http://www.forexreviews.info/the-5-day-trend-training-series-has-launched/

      There is a process to adding to positions and it has to be done right with the moves of the market at the right time based off those moves as well.. This series covers trends from the micro perspective up to the major perspective and will help with your question you are asking on where to consider getting out or holding a position based off what the market is most likely saying in each sequence.

      Let me know if you have any other questions.

  11. Timon,
    Someone pointed to your website and I have watched some of the videos, very good info and done a little back testing, looks really good. I am pretty new into forex and trying to stay away from indicators and trying to understand Elliot Waves which is a journey of itself but as you know very complicated. which one of your products would you suggest I purchase first to be able to use on a small account and slowly progress?

    Thanks in advance for any suggestions.


  12. Dear Timon

    I really like your vids but you are really confusing me with your ‘significant engulfing candle’

    Your definition for the engulfing candle is that the Bullish candle need to engulf the previous bearish candle and break the bearish high, but there is many example in your videos when the signal candle you use isnt a ‘significant engulfing candle,

    Would you be able to draw what exactly is the ‘significant candle,

    see the 1st bullish candle you use on this picture http://www.forexreviews.info/wp-content/uploads/2013/07/significant-buy-candle-1024×526.jpg

    I look forward to hearing your answer

    Keep the great work

    • Hey Ced,
      Thanks for the comment, this type of candle is more so like a momentum type Price Action candle on the 15 minute time frame. It can be classified in two main ways, one that it engulfs like a normal engulfing candle with engulfing the previous candles body with its body and being large or secondly it engulfs a portion of previous candle and high for bullish ( at a low ) or a portion of previous candle and low for bearish ( at a high ).

  13. Thx for quick answer, I emailed you few candles that I wanted clarification on. Keep your awesome work.

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