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Higher Edge within a Single Candlestick

  • #2,561
  • Mar 11, 2025 11:11am Mar 11, 2025 11:11am
Quoting Th3W1z4rd
{quote} Well, your opinion doesn’t change reality. Many traders dismiss strategies or concepts simply because they don’t understand them, haven’t seen them work, or have personally failed at them. I have a structured, repeatable approach with clear logic behind it, and it produces results. I’m sharing because there’s interest, with no benefit to me other than the motivation to keep checking for candle patterns. If you have a logical argument or some way to challenge what I’m saying, I’m all ears. But I don’t want to waste time reading opinions about...
Well, not my intention. Just mean that it's rude to post something off-topic sonstantly in a thread that's on something else.
  • #2,562
  • Mar 11, 2025 11:11am Mar 11, 2025 11:11am
Null hypothesis. Patterns should be 'better' than:
- buy/sell after random green candle;
- buy/sell after random red candle

Hope he knows that.

ps. Interactive trading/Journals are indeed around the corner.
Air force
  • #2,563
  • Mar 11, 2025 11:17am Mar 11, 2025 11:17am
Quoting AntiCre
{quote} Well, not my intention. Just mean that it's rude to post something off-topic sonstantly in a thread that's on something else.
You don’t own this thread, and unless you’re the thread owner, you have the same posting privileges here as I do. Acting like you control who can or can’t participate is pretty arrogant. The Ignore button is there for a reason, and it works perfectly.
  • #2,564
  • Mar 11, 2025 11:21am Mar 11, 2025 11:21am
Quoting Th3W1z4rd
{quote} You don’t own this thread, and unless you’re the thread owner, you have the same posting privileges here as I do. Acting like you control who can or can’t participate is pretty arrogant. The Ignore button is there for a reason, and it works perfectly.
The owner of the thread is long gone. You're posting things irrelevant to discussion. Please be polite and open your own thread where you can discuss every idea you want.
  • #2,565
  • Mar 11, 2025 3:06pm Mar 11, 2025 3:06pm
Quoting HurryK
{quote} I don't understand your proces of generating a candlestick with pseudo-tick data. Either way, there will always be an underlying distribution. It's easy enough to check, simply generate a histogram of your dataset that generated in the candle. IF the distribution is uniform, THEN IMO it is truely random and unpredictable. And hence unprofitable. Again, this would result in a 33-33-33 candle. However IF the distribution is different, e.g. a normal distribution THEN this would result in a 25-50-25 candle as you have shown. However in that...

Hello everyone, I'm super happy to see the discussion come alive again. CP has given me a lot of food for thought a few years back. Let's follow up on some older posts and I share my perspective. Perhaps it sparks further discussion.

I have spent a long time thinking about whether it's even possible to find an edge in a zero-sum game. To make it simple for me, I look at everything through "renko" perspective, which better demonstrates the binary nature of price movements. One block up (Head, Black, +1, whatever), one block down (Tail, Red, -1...).
When you draw it out, congratulations, you get Pascal’s triangle. This basically represents the number of paths leading to a given outcome. In the end, it forms nothing other than a standard distribution. I also tried to apply the Monty Hall paradox. When you are trading two Renko blocks, there are three possible outcomes (like three doors). You pick randomly one at the start. The first block up or down eliminates one option (like the host revealing a goat). If you switch your choice, the probability rises from 1/3 to 1/2, but not to 2/3, which would give you the edge. So after all, it seems that the majority of paths (occurrences) lead close to zero or the mean, but each individual path has the exact same probability: 1/2 * 1/2 * 1/2 * etc.

Can you find the edge in it?
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  • #2,566
  • Mar 11, 2025 3:25pm Mar 11, 2025 3:25pm
About cadchf, this Trump news during New York market that triggered the volatility. Such fundamental news events add to the complexity of the market.

"President Donald Trump said Tuesday he has ordered his administration to raise tariffs on Canadian steel and aluminum imports by an additional 25%, bringing the total duties to 50%. The new policy will go into effect Wednesday morning, Trump said."

https://www.forexfactory.com/news/13...-tariffs-to-50

Cheers
Know what you trade
  • #2,567
  • Mar 11, 2025 3:55pm Mar 11, 2025 3:55pm
Given the cadchf day candle, the question like any other single candle remains the same,

where is the trading edge in this candle today?

Cheers
Know what you trade
  • #2,568
  • Mar 11, 2025 4:12pm Mar 11, 2025 4:12pm
Quoting BWilliam
Given the cadchf day candle, the question like any other single candle remains the same, where is the trading edge in this candle today? Cheers
The only edge I see is that price has to move. But price will move efficiently.
Do you get positive pips with your system or play with money/risk management at 0 pips?
  • #2,569
  • Mar 11, 2025 4:15pm Mar 11, 2025 4:15pm
Quoting BWilliam
Given the cadchf day candle, the question like any other single candle remains the same, where is the trading edge in this candle today? Cheers
What is your version, where is the edge in this candle?
Air force
  • #2,570
  • Mar 11, 2025 4:24pm Mar 11, 2025 4:24pm
Quoting Th3W1z4rd
{quote} Yes, but the challenge is figuring out if some candles can contain enough information to make reliable predictions. That’s why I’m only using the information in single candlesticks and not considering other factors. I’ve identified a one candle pattern, two candle patterns, and three candle patterns. As for a single candle pattern, this is the only one I have found. Eventually, I might share the function of the prices mentioned earlier. Here’s the latest update on this pattern doing what this pattern does. Before...
Have you backtested your patterns and have stats? If no, I suggest stop trading live and backtest your patterns, and show your backtest results here. It will be more benefit.
Who has done enough backtesting knows, that whatever pattern you imagine, it's 50:50 maximum after spread.
  • #2,571
  • Mar 11, 2025 4:36pm Mar 11, 2025 4:36pm
Quoting chriseel
CP: "I don't back-test. Once you know the market structure, there is no need to back-test at all" https://www.forexfactory.com/thread/...49#post8655949 Some 10 years ago Think about it, from another point of view we should be thankful to CP for disappearing without more proof of profitability. Imagine all the intellectual sweat and tears if we couldn't just trash all the voodoo bs
It is interesting how everyone see that market structure.
What I found is: if market goes up, there is bigger probability it will go up, if it reverses at some point - it will go down and the cycle repeats.
  • #2,572
  • Mar 11, 2025 5:08pm Mar 11, 2025 5:08pm
Quoting BWilliam
Given the cadchf day candle, the question like any other single candle remains the same, where is the trading edge in this candle today? Cheers
Just checked the CADCHF D1 single candle pattern this morning, and it looks like a downward push is likely. Just sharing for the single candle analysis.
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The same for USDJPY D1.

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  • #2,573
  • Mar 11, 2025 5:14pm Mar 11, 2025 5:14pm
Quoting IenDzi
{quote} Have you backtested your patterns and have stats? If no, I suggest stop trading live and backtest your patterns, and show your backtest results here. It will be more benefit. Who has done enough backtesting knows, that whatever pattern you imagine, it's 50:50 maximum after spread.
I’m not live trading the single candle pattern or other candle patterns, but I want to start demo testing them since there’s interest. Through the demo testing, a forward test could be done, but I’ve backtested plenty, and it’s definitely not bad. Not just the single candle, but also the two candle and three candle patterns. On live, I trade another easier once daily method.
  • #2,574
  • Edited 5:47pm Mar 11, 2025 5:26pm | Edited 5:47pm
In 2+ candle patterns it's actually the last in sequence candle test, but with reduced sample size. Have fun, arrogant newb wizard
As sample grows - stats will converge, if haven't already.
Why? Because 2 candles can be seen as single
Air force
  • #2,575
  • Mar 11, 2025 5:30pm Mar 11, 2025 5:30pm
Quoting Kruspe
{quote} Hello everyone, I'm super happy to see the discussion come alive again. CP has given me a lot of food for thought a few years back. Let's follow up on some older posts and I share my perspective. Perhaps it sparks further discussion. I have spent a long time thinking about whether it's even possible to find an edge in a zero-sum game. To make it simple for me, I look at everything through "renko" perspective, which better demonstrates the binary nature of price movements. One block up (Head, Black, +1, whatever), one block down (Tail, Red,...
Interesting perspective. Directly mapping the Monty Hall problem to trading seems tricky because markets are more dynamic and less predictable.

As for Renko, the fixed size bricks filter out fluctuations, and the sequence of possible price movements looks like Pascal’s triangle, showing a binomial distribution. Over time, I suppose this method says that price movements may follow a normal distribution.

I personally haven’t found a practical use for these ideas, but I’m not saying there isn’t one, I just haven’t.
  • #2,576
  • Mar 11, 2025 5:42pm Mar 11, 2025 5:42pm
Quoting BWilliam
About cadchf, this Trump news during New York market that triggered the volatility. Such fundamental news events add to the complexity of the market. "President Donald Trump said Tuesday he has ordered his administration to raise tariffs on Canadian steel and aluminum imports by an additional 25%, bringing the total duties to 50%. The new policy will go into effect Wednesday morning, Trump said." https://www.forexfactory.com/news/13...-tariffs-to-50 Cheers
About the Trump news, it's a good point. Big news can definitely add volatility and make things less predictable in the short term. But the technical one candle setup was already showing a move before the news came out. News can speed things up or cause some noise, but it usually lines up with the price patterns instead of completely changing them.
  • #2,577
  • Mar 11, 2025 6:11pm Mar 11, 2025 6:11pm
Shame
Maybe that's why a lot of what he says makes no sense and sometimes with contradictions
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Air force
  • #2,578
  • Mar 11, 2025 6:16pm Mar 11, 2025 6:16pm
Quoting W0lfram
Shame {image}
Lol
  • #2,579
  • Mar 11, 2025 6:57pm Mar 11, 2025 6:57pm
Quoting W0lfram
Shame Maybe that's why a lot of what he says makes no sense and sometimes with contradictions {image}
On the main page of ForexFactory, I still see messages from someone on my ignore list. For the entertainment value, I clicked on the LOL message, and yeah it’s just more nonsense.
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And your point? AI is just a tool, like a calculator, search engine, or spell checker. It doesn’t replace thinking. It makes things more efficient. By that logic, anyone using computers, automation, or Google should be mocked too.

Honestly, I’m glad I saw this. It gave me the reason to stop wasting time on ForexFactory. So, thanks for the mockery, you’ve pushed out someone who was actually bringing value if you objectively looked at my posts. This just confirms that posting here isn’t worth my effort. Peace, I’m out.

Funny though, you didn’t say anything about my pips being AI generated. Haha.
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  • #2,580
  • Mar 11, 2025 7:18pm Mar 11, 2025 7:18pm
Quoting Kruspe
{quote} Hello everyone, I'm super happy to see the discussion come alive again. CP has given me a lot of food for thought a few years back. Let's follow up on some older posts and I share my perspective. Perhaps it sparks further discussion. I have spent a long time thinking about whether it's even possible to find an edge in a zero-sum game. To make it simple for me, I look at everything through "renko" perspective, which better demonstrates the binary nature of price movements. One block up (Head, Black, +1, whatever), one block down (Tail, Red,...

I spent lots of time thinking if it's possible to find an edge -> I tried applied this logic -> the result is not different from the hypothesis I've started with -> can you find the edge?

While I certainly appreciate your contribution, you just did a circular argument where you arrived to the same conclusion you started with.
Perhaps you can please elaborate a little bit more? Yes we all know and saw trough tests that chances of next step being up or down is always the same.

Anyway there is an error on your logic:
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There is no "1/3" occurrence, that's something you decide to see, but thinking it's 1/3 is misleading. Anyway the result does not change: it's a 50-50.
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