DislikedAC, is this something that must always be considered before taking a trade, i.e. that a candle in the opposite direction may have been what caused the ADX to tick up? If that is the case, do you leave such trades alone? The G/U trade worked out ok for me (took profit on one position and B/E on second), but I just wanted to know going forward.
Cheers,
ScottIgnored
Its a good question.
In my opinion if a down candle has a high higher and a higher low in an uptrend it is still a valid signal - (obviously reverse in down trend).
This is because this is what defines a trend.
I normally put the stop loss in the same position. i.e. low or high of indicating candle but often look to see if the low or high has come back to a s/r line. I then put my stop there.
These normally result in a high reward to risk.
If the down candle is one of the candlestick formations (hammer or hanging man) I sometimes wait for the break of the high or low for entry.
Hope that helps.
With so many pairs you can be very selective.