(someone changed the thread title, but I would like the question marks to stay in the title as I don't have answers, thank you ! )
Good evening everyone,
I was re-reading Crucialpoint’s posts, thanks to someone who made me take a look at it again, and there is this post where he says :
“Have you ever wonder, when you have a line graph, why in the hell would you invent the candlestick!!! ?
Clever Japanese people, they never did tell you why they invented it in the first place.”
http://www.forexfactory.com/showthre...75#post5162175
I also read several times on this forum and some others, people who told about the mathematical properties offered by the candlesticks (OHLC) that may contain some inherent edge, and allows one to know with higher probability where the Market might go.
I don’t have any answer at all, only questions (and some assumptions), so I have thought to create the thread and see if it might bring some thinking to some of us ^^.
To keep it simple, let’s consider first that the candle color is also the “High-Low” order inside that candle: When Open<Close or Open=Close, the Low occurred before the High, and when Open>Close the High occurred before the Low.
( From my studies of the Dax, looking at the regular trading hours over the last 6 years, 77% of Up days [Open<=Close] had their Low occurring before the High, and 80% of Down days [Open>Close] had their High occurring before the Low )
http://i57.tinypic.com/rr8kcw.png
Also, If we consider that at the time they were created, candlesticks were drawn by hand with a pencil, creating a ‘empty’ body when Open<Close and a ‘filled’ body when Open>Close, I think we can assume that the wicks were drawn with the same pencil and so the same colour. It would mean, to me, that wicks have somehow always the same meaning, whatever it is on a ‘up’ candle or ‘down’ candle, but the meaning of the body is different.
That’s what reinforces my thinking about ‘cycles’, which in that case are an area of price that was visited on the way up and then revisited on the way down, or vice versa. So that a wick is a complete cycle, and a body an incomplete cycle.
Here is an example with one candlestick :
http://i58.tinypic.com/w8nlua.png
Here is an example with 2 candlesticks :
http://i61.tinypic.com/sdlj78.png
Maybe all this means nothing at all, haha. But it has been bugging me for some time now so I decide to ask if that makes some sense to some of you ?
If we consider these “incomplete cycles” (which we might be defined actually as ‘imbalances’) with their magnitude in pips and their duration, could it lead somewhere ?
Is there more probability that the market will complete an incomplete cycle rather than let it incomplete ?
If indeed It ‘has to’ complete these cycles, is there some order (I guess that ‘yes’ there is, but how to unravel it) ?
If indeed all this has some sense, could it be that the ‘true’ Market look actually like this if we can see through all Its dimensions ?
http://i61.tinypic.com/2v80ig3.png
As you can see I only have questions, do not hesitate to share what you think even if you have only questions too. At least it can make us think more
.
Thank you for reading
030985
Good evening everyone,
I was re-reading Crucialpoint’s posts, thanks to someone who made me take a look at it again, and there is this post where he says :
“Have you ever wonder, when you have a line graph, why in the hell would you invent the candlestick!!! ?
Clever Japanese people, they never did tell you why they invented it in the first place.”
http://www.forexfactory.com/showthre...75#post5162175
I also read several times on this forum and some others, people who told about the mathematical properties offered by the candlesticks (OHLC) that may contain some inherent edge, and allows one to know with higher probability where the Market might go.
I don’t have any answer at all, only questions (and some assumptions), so I have thought to create the thread and see if it might bring some thinking to some of us ^^.
To keep it simple, let’s consider first that the candle color is also the “High-Low” order inside that candle: When Open<Close or Open=Close, the Low occurred before the High, and when Open>Close the High occurred before the Low.
( From my studies of the Dax, looking at the regular trading hours over the last 6 years, 77% of Up days [Open<=Close] had their Low occurring before the High, and 80% of Down days [Open>Close] had their High occurring before the Low )
http://i57.tinypic.com/rr8kcw.png
Also, If we consider that at the time they were created, candlesticks were drawn by hand with a pencil, creating a ‘empty’ body when Open<Close and a ‘filled’ body when Open>Close, I think we can assume that the wicks were drawn with the same pencil and so the same colour. It would mean, to me, that wicks have somehow always the same meaning, whatever it is on a ‘up’ candle or ‘down’ candle, but the meaning of the body is different.
That’s what reinforces my thinking about ‘cycles’, which in that case are an area of price that was visited on the way up and then revisited on the way down, or vice versa. So that a wick is a complete cycle, and a body an incomplete cycle.
Here is an example with one candlestick :
http://i58.tinypic.com/w8nlua.png
Here is an example with 2 candlesticks :
http://i61.tinypic.com/sdlj78.png
Maybe all this means nothing at all, haha. But it has been bugging me for some time now so I decide to ask if that makes some sense to some of you ?
If we consider these “incomplete cycles” (which we might be defined actually as ‘imbalances’) with their magnitude in pips and their duration, could it lead somewhere ?
Is there more probability that the market will complete an incomplete cycle rather than let it incomplete ?
If indeed It ‘has to’ complete these cycles, is there some order (I guess that ‘yes’ there is, but how to unravel it) ?
If indeed all this has some sense, could it be that the ‘true’ Market look actually like this if we can see through all Its dimensions ?
http://i61.tinypic.com/2v80ig3.png
As you can see I only have questions, do not hesitate to share what you think even if you have only questions too. At least it can make us think more
.Thank you for reading
030985
)
