3. Read context first
Here is a sentence: "He is going to the bank." Does he mean a river bank or a money bank? You cannot know from the sentence alone. You need the context.
Charts are the same. A hammer candle is just a shape. Whether it means anything depends on where it appears.
3.1 Three layers of context
1. The trend (structure). Is the market making HH-HL, LH-LL, or ranging? A bullish signal in an uptrend is a continuation signal – high quality. A bullish signal in a strong downtrend is fighting the trend – low quality.
2. The location (levels). Is price at a support or resistance zone, a round number, a moving average, a previous breakout level? Or in the middle of nowhere? Signals at levels matter. Signals in the middle mostly don’t.
3. The recent story. What happened in the last 10–20 candles? A strong impulse? A slow drift? A failed breakout? The story tells you who has been winning lately.
3.2 Same candle, two places
If a friend coughs once during a dusty road trip, you don’t worry. If the same friend has been coughing for three weeks with fever, you take them to a doctor.
The cough is the same. The context decides how serious it is. A candle pattern is that cough.
3.3 A context checklist
Before looking for any signal, say these three lines out loud:
- "The trend on this timeframe is ____."
- "Price is at / not at a level: ____."
- "In the last few candles, ____ have been winning."
Only after that, look for a candle signal.
Beginners pattern pehle dekhte hain, context baad mein. Pros ulta karte hain. Context first, signal second. If the context is weak, even a perfect-looking pattern is a pass.
Patterns against the trend and away from levels have poor odds.
Trend, location and recent price behaviour are the three layers of context.
- The same candle can mean different things in different places.
- Context = trend + location + recent story.
- Signals at levels and with the trend have better odds.
- Read context first, then look for a signal.
- Ek line mein: Pehle context, phir signal – galat jagah pe perfect pattern bhi bekaar hai.