What is the Candle Combo?
Created by me ThetradingNinja, I developed this pattern when I started to see it often on specific time frames frequently. Its a continuation setup that consists of “Two candles” with the combination of the Middle Keltner Channel.
Picture 1. $SPX 4hr Chart:
This is an actual chart used in chat as our trade signal to go long $SPX with calls.
When does it occur?
This candle setup usually occurs after a downtrend or can be spotted in an uptrend. It happens either during or right before crossing the Middle Keltner channel.
Where can I spot it?
Mainly spotted on the 4 hour time frame. Also can be on shorter time frames like hourly and longer Daily and Weekly. Look for follow through.
Picture 2. $SPX 4hr Chart: 2/26
Trade With Ninja 
Hi – what settings do you use for your Keltner channel? for example, multiplier & the EMA period? thanks
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Simple MA also 1.5/2.0 or 2/2.0
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Thank you. couple more questions:
1. Curious to know why you use MA and not EMA? EMA gives more weight to recent prices so why SMA?
2. If I understood your response, you use SMA,
upper band: SMA * 1.5 (or 2)
lower band: SMA * 2 (or 2.5) – i think you mad a mistake in “2/2.0”
the middle band is your SMA itself. what period is that SMA? 30?
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Not a mistake if u have TOS the keltner channel settings you’ll see Factor 1.5 or 2 and length is 20
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ok. got it. interestingly, TOS uses SMA as you mentioned, whereas Questrade IQ Edge (which I’m using) uses EMA by default. it is configurable, though. thank you!
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U can customize it to your needs I change mine to what works for me
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yep, thanks. also, do you complement this with other indicators for momentum? For instance, I use RSI …
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