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Candle Stick Pattern & Fibonacci Retracement

  • #61
  • Jan 23, 2007 6:18pm Jan 23, 2007 6:18pm
Quoting leo2006
Can u attach the chart ? I dont know which 'evening star' u mean..

Leo
No.1 This is what I call ‘Evening star’ because this candle stands above the candle no 1a and no 1b. Evening star is a Trend reversal candle

Ignore the USD/JPY trade please.

The criteria for an evening star trend reversal signal is when the new high is totally engulfed by a bear candle. Is that correct?
The attached image has circled candles, is this an evening star formation?
Attached Image
  • #62
  • Jan 23, 2007 7:33pm Jan 23, 2007 7:33pm
For me, it is more like a Bearish Engulfing PAttern.


Leo
Forex has never been this SO exciteD !!
  • #63
  • Jan 24, 2007 7:47am Jan 24, 2007 7:47am
Quoting leo2006
Hi there,

I’d like to give u an example of EUR/JPY daily. I give numbers on the chart :

No.1 This is what I call ‘Evening star’ because this candle stands above the candle no 1a and no 1b. Evening star is a Trend reversal candle.

No.2 This is the well-known Bullish engulfing candle. U see the lower wick is long enough to ensure there will be an up trend.

No. 3 The price is breaking the 76.4 fibo.

No.4 Watch out, it would break this one too, since the 76.4 fibo is already passed.

I enter at 157.56. Exit at 100 fibo ( 158.03 )

So, this is gonna be an UP trend. To set your fibonacci, left click your fibo at Evening star ( upper wick ), then drag it to the lower wick of Bullish engulfing candle. So, the evening star will have 100 fibo and the bullish engulfing will have the 0 fibo. Voila, you have your target price now. Remember this, once the price has passed the 76.4 fibo, it usually hits the 100 fibo or even 168.1 fibo.
Watch out for trend reversal!! Get out from trade when u see the price goes against u and supported by trend reversal candles!!

Hope this would help...


LEo

i'm still confuse with the evening star.. how did you determine the point 1a and 1b? Can you give another example?
  • #64
  • Jan 24, 2007 12:23pm Jan 24, 2007 12:23pm
Quoting wan_grunge
i'm still confuse with the evening star.. how did you determine the point 1a and 1b? Can you give another example?

As far as I can help,you see the candle "away" from two other candles around. Those are the two points 1a,1b. I believe this is morning star, but it is the same just opposite...am I right?
Attached Image
  • #65
  • Jan 24, 2007 1:07pm Jan 24, 2007 1:07pm
Evening Star
http://stockcharts.com/education/cha...veningStar.gif

A bearish reversal pattern that continues an uptrend with a long white body day followed by a gapped up small body day, then a down close with the close below the midpoint of the first day.
  • #66
  • Jan 24, 2007 3:40pm Jan 24, 2007 3:40pm
Great charts, Leo. Hope to see more price action analysis on current chart situation and following up with results and reviews.
Target: Trading naked.
  • #67
  • Jan 24, 2007 3:43pm Jan 24, 2007 3:43pm
imho that 's not morning star. the third bar is too short. however there is a gap between the second and the third bar and the fact that the price failed to fill the gap indicates strong bullish sentiment/support there so it was pushed higher.

Quoting erko
As far as I can help,you see the candle "away" from two other candles around. Those are the two points 1a,1b. I believe this is morning star, but it is the same just opposite...am I right?
Target: Trading naked.
  • #68
  • Jan 24, 2007 5:13pm Jan 24, 2007 5:13pm
Quoting aha
imho that 's not morning star. the third bar is too short. however there is a gap between the second and the third bar and the fact that the price failed to fill the gap indicates strong bullish sentiment/support there so it was pushed higher.
So the third HAS to reach at least to a point over the half of the first bar?
  • #69
  • Jan 24, 2007 5:17pm Jan 24, 2007 5:17pm
This is getting off the point of the possible evening star but I think that is a morning star in erko's chart.

The June '06 monthly bar does not seem to be correct.

I have the following data from TradeStation: Open 112.60, High 116.70, Low 111.32 and Close of 114.45

This would make it a more bullish looking bar and the close would be above the midpoint, as is required to the true definition of morning star.
  • #70
  • Jan 25, 2007 4:23am Jan 25, 2007 4:23am
i believe candlesticks to me more accurate than any other type of chart out there

a good book, what i consider the holy grail on the subject is Steve Nison's Japanese Candlestick Charting Techniques

i have the first edition on pdf, anyone interested feel free to email me @ [email protected] and i will gladly sent it out

PS i will wait a couple of days before doing so, so that i can reach the maximum number of people

I've tried posting the book here but the size exceeds limits
cheers, happy trading
  • #71
  • Jan 26, 2007 2:37am Jan 26, 2007 2:37am
Quoting leo2006
Herewith i give an example of USD/JPY which had made it's perfect price projection at level 161.8 fibonacci.
Set the 1st signal ( Bearish Engulfing pattern ) at level 100 fibonacci and set the 2nd signal ( Bullish Engulfing pattern ) at level 0. By this way, you can know where the price would be. Once the price over reaches the level 76.4 fibonacci, usually it will hit the level 161.8.


Leo
Hello Leo, here are some questions regarding your post #3. I have uploaded your chart below for easy reference.

I am of the impression that both the patterns you identified are not entirely valid. For an ideal bearish engulfing pattern, the green bullish bar should be short and stubby. In the chart, this bar is more than 60% the height of the red bearish bar... certainly not short and stubby enough.

As for the bullish engulfing pattern you identified, the red bearish bar is not even totally engulfed by the green bullish bar. The low of the bearish bar is lower than the low of the bullish bar... further, the bearish bar is not short and stubby enough too.

I do apologise if I have misunderstood the patterns myself, and would gladly take in your corrections.
Attached Image
I am JuMPeR.
  • #72
  • Jan 26, 2007 3:55am Jan 26, 2007 3:55am
Quoting jumper
Hello Leo, here are some questions regarding your post #3. I have uploaded your chart below for easy reference.

I am of the impression that both the patterns you identified are not entirely valid. For an ideal bearish engulfing pattern, the green bullish bar should be short and stubby. In the chart, this bar is more than 60% the height of the red bearish bar... certainly not short and stubby enough.

As for the bullish engulfing pattern you identified, the red bearish bar is not even totally engulfed by the green bullish bar. The low of the bearish bar is lower than the low of the bullish bar... further, the bearish bar is not short and stubby enough too.

I do apologise if I have misunderstood the patterns myself, and would gladly take in your corrections.
HI jumper
I just want to explain that the meaning of ENGULF : the second candle's body must Cover the previous candle's body, NOT cover the previous candle's body plus its wicks Both, for Bullish and Bearish..
Btw, i am sorry that i can not join the forum for a while.. It's been a tiring and exhausting days for me coz this week, i've had a final examination in my university
I just read a glance of the previous posts and hopefully i can give some comments soon... Thnks for all of your participation...


Happy trading!


Leo
Forex has never been this SO exciteD !!
  • #73
  • Jan 26, 2007 4:10am Jan 26, 2007 4:10am
Quoting leo2006
HI jumper
I just want to explain that the meaning of ENGULF : the second candle's body must Cover the previous candle's body, NOT cover the previous candle's body plus its wicks Both, for Bullish and Bearish..
Btw, i am sorry that i can not join the forum for a while.. It's been a tiring and exhausting days for me coz this week, i've had a final examination in my university
I just read a glance of the previous posts and hopefully i can give some comments soon... Thnks for all of your participation...


Happy trading!


Leo
Hi again Leo, you are right. I didn't realise that it's only the body that is important, thanks! Personally, I have not been paying particular attention to the candle patterns except for hammer ones.

Then again, if we look back at the bearish engulfing pattern, it seems to me that the body of the green body is not totally engulfed by the red's. The "high" of the green body seems higher than the "high" of the red body. Is my new understanding not complete? Thanks again.
I am JuMPeR.
  • #74
  • Jan 28, 2007 8:30am Jan 28, 2007 8:30am
Quoting SunTrader
This is getting off the point of the possible evening star but I think that is a morning star in erko's chart.

The June '06 monthly bar does not seem to be correct.

I have the following data from TradeStation: Open 112.60, High 116.70, Low 111.32 and Close of 114.45

This would make it a more bullish looking bar and the close would be above the midpoint, as is required to the true definition of morning star.
Thanks, got it, just a note, that is IBFX demo data feed But for the peace of my own mind, i cant consider that one a morning star, because one has to follow his own data feed
  • #75
  • Jan 29, 2007 10:04pm Jan 29, 2007 10:04pm
Quoting erko
Thanks, got it, just a note, that is IBFX demo data feed But for the peace of my own mind, i cant consider that one a morning star, because one has to follow his own data feed
Thats true but it might be to one's detriment if the data is not right. That is why I have data from two sources, TradeStation and broker, so I can keep track of spreads and data points.
  • #76
  • Jan 29, 2007 11:43pm Jan 29, 2007 11:43pm
Hi Leo,

Are you using stop loss everytime your are trading? How do you determine the Stop loss point ?
  • #77
  • Jan 30, 2007 2:33pm Jan 30, 2007 2:33pm
Quoting SunTrader
Thats true but it might be to one's detriment if the data is not right. That is why I have data from two sources, TradeStation and broker, so I can keep track of spreads and data points.
Yes, that is true,maybe even one more broker or directly with a bank, but that would be the way if i had done all backtesting that i wanted and found a method that i am comfortable with , practiced, traded small live acc.,etc....i am still working out my trading plan do you use two platforms, or two feeds on one?
  • #78
  • Jan 30, 2007 5:41pm Jan 30, 2007 5:41pm
I use IB for trading and TradeStation for charts and analysis.
  • #79
  • Feb 20, 2007 12:58pm Feb 20, 2007 12:58pm
Hello All,

Well, I must say that this is one of the most interesting threads on trading. Price action itself - that is probably the oldest, yet most reliable trading method, sometimes I feel it's almost getting forgotten. People get hooked on indicators, more indicators, and more coplicated charts, which don't solve the problem of loosing. I used to be "hooked on indicators", now I simply hate them.
Candles formations, patterns, harmonics, Fibonacci, Gann, Elliot, Vegas - IMO it's all that can work in trading.
Thank you Leo and all the best with your exams.
This truly is a benefitting thread!

George
  • #80
  • Feb 20, 2007 5:12pm Feb 20, 2007 5:12pm
Quoting SunTrader
I use IB for trading and TradeStation for charts and analysis.
Great .............
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