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I need some clarification on some strategies ...Candlesticks and PA

  • Post #1
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  • First Post: Dec 12, 2009 5:26pm Dec 12, 2009 5:26pm
  •  magisana
  • | Joined Apr 2009 | Status: Member | 19 Posts
Can someone tell me is there a difference, probably a stupid question, but are they the same thing or different... Aren't candlesticks just PA?? I am confused...
What about chart patterns, are they focused on using Candlestick or both bars and candlesticks...
Also another thing... support and resistance..
Say the price has been moving up (4hr just for eg) so your in a up trend. Is a breakout strategy when price moves above a level of previous support/resistance? How do you establish your exact entries? I am starting to recognise different patterns, but I don't really know how I am supposed to judge my entries and how long to hold the position for until profit. Do I wait for a pull back before entering...
Can someone please recommend a book on this so I can get the clarfication I need.
Also I am not fussed on having various MA all over my prices as I find it to hard so I want to focus on maybe only a couple of indicators for confirmation, but mainly use PA ... Anyone doing this?
  • Post #2
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  • Last Post: Dec 12, 2009 6:00pm Dec 12, 2009 6:00pm
  •  CodeMeister
  • Joined Sep 2009 | Status: Making Code While Making Pips | 1,672 Posts
Candlestick patterns are used by some people who call their trading style price action. Others use price action systems without candlestick patterns and rely on support and resistance and MAs. Others do a combination. So I guess the simplest answer is that candlestick patterns are sometimes used by people as part of a price action system.

Breakouts can be from support/resistance. I like to use a different method when I see activity has died off and the price bars are going sideways for several hours on a 15 minute chart. I then set up a straddle about 10-15 pips away and catch some pips when the inevitable breakout occurs.

Don't get too caught up in terminology, because different people will use the same term differently anyway. It is better to understand what is going on and what the name is.

I see that you are on the right track when you state that you are starting to see certain patterns repeating. After a while it becomes just like the movie "Groundhog Day" only with several variations, because you don't see anything that you haven't seen before.

Don't waste time on indicators either - everything you need to see is in the price bars.
 
 
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