Trigger candle
The specific candle whose close activates an entry.
Full explanation
A trigger candle turns a level into a decision. Common examples are a candle closing beyond a range boundary, a rejection candle at a key level, or an engulfing candle that reverses the previous one.
Only the close counts. A candle that trades through a level and closes back inside told you the opposite of what it looked like mid-formation.
The trigger candle also frames the trade: its high and low usually define where the stop loss sits and how large the position can be.
Why traders watch it
Working from a named candle removes the guesswork about when a setup became a trade, which makes journalling and review far more useful.
Trading considerations
- Wait for the close on your chosen timeframe before acting.
- Use the candle high or low to place the stop, then size to your risk.
- An oversized trigger candle often means the good entry has already gone.
Educational guidance only — never a trading signal or recommendation.
Related indicators
ATR (Average True Range)
ATR, or Average True Range, measures the average distance a market travels over a chosen number of periods, including gaps. It is a pure volatility reading with no directional bias. Traders use ATR to set stop distances that respect normal noise, to size positions consistently, and to judge whether current conditions are unusually quiet or unusually fast.
Bearish candle
A candle that closes below its open — sellers finished the period in control.
Bollinger Bands
Bollinger Bands are a volatility indicator made up of a moving average with upper and lower bands that expand and contract as market volatility changes. They help traders judge whether price is becoming stretched, identify volatility changes, and support both trend-following and mean reversion analysis.
Breakout
A breakout occurs when price moves decisively beyond a defined level such as a range high, trendline or consolidation boundary. It signals that the balance between buyers and sellers has shifted and can start a sustained move. Breakouts also fail often, so traders look for confirmation through follow-through, expanding range and a successful retest of the broken level.
Bullish candle
A candle that closes above its open — buyers finished the period in control.
Candle
A single bar on a candlestick chart showing the open, high, low and close for one period.