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Third candle bounce

  • #41
  • May 27, 2024 8:12pm May 27, 2024 8:12pm
Quoting d5400
{quote} I don't claim to invent anything. Just pointing out a simple pattern. Third candle bounce happens. Sometimes it doesn't. The pattern is not a system. The system is creating rules about when pattern should work. That's why I go into refinement in LTF. Also since the pattern is fractal, it makes sense to create a dashboard that shows it on multiple timeframes to increase confidence and to catch it on multiple instruments.

hi @d5400

Good trading method and is profitable with proven money management strategy for entries and exits. This is one of my trade setup entries which I traded since 2018.

If you are looking MTF Fractals you can consider @FerruFX' Fractals until you develop your own dashboard.
here> https://www.forexfactory.com/thread/...ard-indicators

USDCAD May28,
we have a fractal high ... that's the swing high on Daily


Attached Image (click to enlarge)
Click to Enlarge Name: UCad FerruFx MTF 28-5-2024 9-04-01 am.png Size: 27 KB



...
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #42
  • May 27, 2024 9:08pm May 27, 2024 9:08pm
Quoting emmanuel7788
{quote} hi @d5400 Good trading method and is profitable with proven money management strategy for entries and exits. This is one of my trade setup entries which I traded since 2018. If you are looking MTF Fractals you can consider @FerruFX' Fractals until you develop your own dashboard. here> https://www.forexfactory.com/thread/...ard-indicators USDCAD May28, we have a fractal high ... that's the swing high on Daily {image} ...
Thank you sir, for visiting my thread. Your influence is on many of my favorite traders. I respect FerruFX very much and would seek his help with my dashboard when I figure out the specs for it.
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  • #43
  • Edited 10:37am May 28, 2024 5:43am | Edited 10:37am
d5400, thank you for sharing this method.

Please find attached a simple indicator to markup the candles.
-The diamond means the 2nd candle is a HH or LL.

  1. The second candle is to be the same direction as first in this version of indicator (can be changed later).
  2. This occurs in realtime as current candle fulfils the rule.
  3. Then we wait for the rule below to be fulfilled.

-The arrow means candle 3 low of high is lower / higher than the candle 1.
-Obivously there will be situations where 2nd candle is a HH or LL but the 3rd candles does not meet the rules. So need to wait for the arrow to appear.

Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 49 KB


I have not incorporated the 3rd candle being a HH or LL yet; await feedback.
Looks like some filters are needed.

This is a starting point and the indicator can be developed further.

regard, R.
Attached File(s)
File Type: ex4 3rdCandleBounce_v1.ex4   15 KB | 346 downloads
  • #44
  • May 28, 2024 12:30pm May 28, 2024 12:30pm
Quoting Ronin-
d5400, thank you for sharing this method. Please find attached a simple indicator to markup the candles. -The diamond means the 2nd candle is a HH or LL. The second candle is to be the same direction as first in this version of indicator (can be changed later). This occurs in realtime as current candle fulfils the rule. Then we wait for the rule below to be fulfilled. -The arrow means candle 3 low of high is lower / higher than the candle 1. -Obivously there will be situations where 2nd candle is a HH or LL but the 3rd candles does not meet the...
Thank you, developing specs continues. Here's the chart where I marked third candles. Crosses mark candles that are not considered because they open on the other side of the 1st candle wick and never reach it. I also marked inside bars. An inside bar marks the mother bar before it, and any bar after that is considered inside bar until it breaks mother bar. Checks mark the candles that follow outside bars and reach the 1st candle wick from the right direction.

Safe entries are from the 1st candle wick. For long, third candle needs to enter 1st candle upper wick from above, and for short, enter lower wick from below.
Attached Image (click to enlarge)
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  • #45
  • May 28, 2024 12:38pm May 28, 2024 12:38pm
Quoting Ronin-
d5400, thank you for sharing this method. Please find attached a simple indicator to markup the candles. -The diamond means the 2nd candle is a HH or LL. The second candle is to be the same direction as first in this version of indicator (can be changed later). This occurs in realtime as current candle fulfils the rule. Then we wait for the rule below to be fulfilled. -The arrow means candle 3 low of high is lower / higher than the candle 1. -Obivously there will be situations where 2nd candle is a HH or LL but the 3rd candles does not meet the...
1) Second candle needs to break previous candle, or mother bar. If this is an outside bar, then it broke both directions, but further rules may filter one direction out.
2) Safe setup: Third candle opens above or inside upper wick of 1st candle to long setup. Third candle opens below or inside lower wick of 1st candle for short setup.
3) Aggressive setup: Third candle reaches upper wick for long setup, reaches lower wick for short setup.
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  • #46
  • May 28, 2024 3:33pm May 28, 2024 3:33pm
Attached Image (click to enlarge)
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Let's see if I did right.
  • #47
  • May 28, 2024 3:55pm May 28, 2024 3:55pm
Quoting flashpaul
{image} {image} Let's see if I did right.
That worked just off 1st candle high. On M15 there was H&S
Attached Image (click to enlarge)
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  • #48
  • May 28, 2024 8:32pm May 28, 2024 8:32pm
Quoting d5400
{quote} Ha funzionato appena al livello della prima candela. Su M15 c'era H&S {image}
Clearly by working on lower TFs it is possible to find better income.

Be patient please. What means H&S ?
  • #49
  • May 28, 2024 9:04pm May 28, 2024 9:04pm
Quoting flashpaul
{quote} Clearly by working on lower TFs it is possible to find better income. Be patient please. What means H&S ?
Head and Shoulder, Quasimodo
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  • #50
  • May 28, 2024 9:25pm May 28, 2024 9:25pm
Quasimodo is a very convenient setup for refinement. Recently a bunch of setups breaking daily highs/lows on M15 were quasis.
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  • #51
  • May 29, 2024 3:20am May 29, 2024 3:20am
Quoting d5400
{quote} 1) Second candle needs to break previous candle, or mother bar. If this is an outside bar, then it broke both directions, but further rules may filter one direction out. 2) Safe setup: Third candle opens above or inside upper wick of 1st candle to long setup. Third candle opens below or inside lower wick of 1st candle for short setup. 3) Aggressive setup: Third candle reaches upper wick for long setup, reaches lower wick for short setup.
Thank you for the explaination. Is it correct that the thrid candle open must be above / below 2nd candle close?
  • #52
  • May 29, 2024 4:12am May 29, 2024 4:12am
Hi, I am practicing. I have highlighted what I think are 3rd candles that meet the criteria. Criticism welcome.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 10 KB
  • #53
  • May 29, 2024 8:08am May 29, 2024 8:08am
Quoting flashpaul
{image} {image} Let's see if I did right.
Where did you get that indicator with the large candles?
  • #54
  • May 29, 2024 8:14am May 29, 2024 8:14am
Quoting d5400
This is very simple
This is not simple. There is another word starting with "s" character.
Let me ask you a question. What candles are? Candles came from Japan. There was a market of rice. Why it worked? Because the volume of the rice was about the equal each year. And what candles now? One candle has 1$ inside, next 1m$. So what you are trying to compare and what magic must happen to let it work for you?
You can create simple script that will check your magical setups and then you will see that it has max 47% winrate and never more.
Why 47%? Because all you need is 51% to be profitable, but that 4% are fees, spread, slippage, red news, weekends, fat finger issues, greed, fear and all the other stuff that works against you and for the broker. Casino never lose.
Observer effect
  • #55
  • May 29, 2024 8:22am May 29, 2024 8:22am
Quoting Ronin-
{quote} Thank you for the explaination. Is it correct that the thrid candle open must be above / below 2nd candle close?
3rd candle open is above/below 1st candle close
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  • #56
  • May 29, 2024 8:26am May 29, 2024 8:26am
Quoting tuffysteeler
{quote} Where did you get that indicator with the large candles?
https://www.forexfactory.com/thread/...0#post14068580
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  • #57
  • May 29, 2024 9:39am May 29, 2024 9:39am
Quoting HazHazHaz
{quote} Hello d5400, can you please see this image below and check if I got your concept right? Tell me where I am wrong please, thank you. {image}
If 1st candle wick is non-existent, then it's body has to be considered. 1st. and 2nd. don't have to be bullish together, but 2nd candle has to be bullish to create a bullish setup, as long as 3rd candle opens above 1st candle close.
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  • #58
  • May 29, 2024 10:17am May 29, 2024 10:17am
Quoting d5400
{quote} as long as 3rd candle opens above 1st candle close. {image}
Sorry, "as long as 3rd candle opens above 1st candle close"... Do you mean 1st candle's close or 1st candle's HIGH (for bullish)?
  • #59
  • May 29, 2024 10:54am May 29, 2024 10:54am
Quoting HazHazHaz
{quote} Sorry, "as long as 3rd candle opens above 1st candle close"... Do you mean 1st candle's close or 1st candle's HIGH (for bullish)?
Above high is too strict of a requirement. Can miss a lot of setups. But it does seem like a safer bet.
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  • #60
  • May 30, 2024 8:45am May 30, 2024 8:45am
I tried on demo the system and what happens in that frequently the third candle already lose his force and the price comes back closing in loss, or at the contrary the trend is so strong that doesn't pick the high of the first candle and goes on without to open trades. Il you close in the day, you can make only very few pips because the force is already going in exhaustion. It depends by lucky. Or you do work also in minor timeframes to take advantage of configurations to anticipate the entries, as you have already shown, or the results will be weak.
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