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The Market Explained by candle sticks and price action

  • #41
  • Feb 7, 2010 7:34am Feb 7, 2010 7:34am
Well my normal trading would see me take that first bearish pin on the 5m, those two candle pullbacks normally fare well for me.. plus its retesting that trendline it broke

But trying to think like you do, is it the break of the multiple lows that were made, before the IMPULSE?
  • #42
  • Feb 7, 2010 8:08am Feb 7, 2010 8:08am
Quoting Sim
Well my normal trading would see me take that first bearish pin on the 5m, those two candle pullbacks normally fare well for me.. plus its retesting that trendline it broke

But trying to think like you do, is it the break of the multiple lows that were made, before the IMPULSE?
Yes those bars with wicks marked in the red circle are all signs of failure Right before the impulsive move down would be a safe trade because we had a break of the horizontal trend line then it tried to make its recovery back through it and failed solidifying what everyone was thinking this is not buy anymore.

Section D trend line was also broken and tested so we know its "Safer" to trade counter trend of D (which is short)
  • #43
  • Feb 7, 2010 8:18am Feb 7, 2010 8:18am
Quoting Sim
But trying to think like you do, is it the break of the multiple lows that were made, before the IMPULSE?
Dont think of it as a break think of it as a test and then a failure of the test.

A Short placed at The red circle is the best trade also never sell at an old low you never know where buyers are lurking or Bears covering their shorts.

That is why you keep saying that you keep getting caught in traps it might because your selling old lows. Old lows are classic places to trap up late bears who miss the earlier entries. These areas of old lows are sometimes overwhelmed with bears covering their shorts or anxious long who want to catch a reversal early . It is actually where i would have covered if i saw any signs of buying. but it didnt really show any. The safe exit would have been obviously the next bar which is a classic reversal bar.
  • #44
  • Feb 7, 2010 8:33am Feb 7, 2010 8:33am
What I tend to get caught out on in anything above m15, is a pullback, with the main trend, which barely gets out of breakeven but continues in the opposite direction where I know it will come back, but in the mean time the risk is not worth it. It stops me and other typical traders out, then comes back to our assumption lol
  • #45
  • Feb 7, 2010 8:40am Feb 7, 2010 8:40am
Quoting Sim
What I tend to get caught out on in anything above m15, is a pullback, with the main trend, which barely gets out of breakeven but continues in the opposite direction where I know it will come back, but in the mean time the risk is not worth it. It stops me and other typical traders out, then comes back to our assumption lol
Can you be a little more specific? Are you trying to say you have been buying or selling corrective moves and barely getting out at break even. Getting squeezed out of a trade means that the move you believed in has failed and you want to be trading the direction of where your getting squeezed. Your trading against the overall market sentiment.
  • #46
  • Feb 7, 2010 8:44am Feb 7, 2010 8:44am
It's when I switch to longer term charts, shorter term is fine, m5 right down to s10.

I get squeezed out of it knowing it's a fake countertrend move causing my SL to be hit... so say in a down trend, I see confluence of SR and fibs, and a pattern or two...enter correctly and conservatively, then market squeezes me out only to come back later in the day
  • #47
  • Feb 7, 2010 8:50am Feb 7, 2010 8:50am
Quoting Sim
It's when I switch to longer term charts, shorter term is fine, m5 right down to s10.

I get squeezed out of it knowing it's a fake countertrend move causing my SL to be hit... so say in a down trend, I see confluence of SR and fibs, and a pattern or two...enter correctly and conservatively, then market squeezes me out only to come back later in the day
im not even going to pretend i know how to use Fibs. I dont really believe in Fibs but i have heard good results for some so i wont dismiss them. Show me an example in a screen shot. Run me through the time line of actions that made you place the trade you got squeezed out of.
  • #48
  • Feb 7, 2010 9:06am Feb 7, 2010 9:06am
The problem is mainly execution in real time... looking back for the examples is depressing because there are so many good trades but I only get caught in the bad ones... time limitation could be a probability as I notice more fake moves in the morning,, and I enter them because i have lectures in the afternoon :S

See here, nice candle pattern, a key psych level, a key first touch of fib, EU in a well 3 day uptrend so far,, how do I get caught in the reversal trade which is part of a continuation trade in my eyes :s

I waited for continuation hence barely got outta BE.
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  • #49
  • Feb 7, 2010 9:39am Feb 7, 2010 9:39am
Quoting Sim
The problem is mainly execution in real time... looking back for the examples is depressing because there are so many good trades but I only get caught in the bad ones... time limitation could be a probability as I notice more fake moves in the morning,, and I enter them because i have lectures in the afternoon :S

See here, nice candle pattern, a key psych level, a key first touch of fib, EU in a well 3 day uptrend so far,, how do I get caught in the reversal trade which is part of a continuation trade in my eyes :s

I waited for continuation hence...

Like i said about FIBs. I think your fib might be draw wrong too. In my mind fibs see like magic numbers people want to follow that don't actually mean the same thing to every other traders.

Take a look at the daily. BUYS ARE OUT OF THE QUESTION in a land slide bear market. Only look for failures of counter trend movements (Failed bulls).

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See how the daily clearly shows respect of the moving average. Zoom out a little before placing a trade in lower time frames. It will help give you some perspective.

See the line i have drawn dont think about placing a buy until that line is broken and then tests its last low and moves higher.

Trust me when i say winning at trading is alot about being patient.

I was bored as shit waiting for this two day rally to fail and guess what i left the house to do some business and missed the beginning of this move. I was PISSED!!!
  • #50
  • Feb 7, 2010 9:42am Feb 7, 2010 9:42am
Hahah.. I see

And when daily goes into consolidation? just range trade at extremes? or stay out for a few weeks?
  • #51
  • Feb 7, 2010 6:51pm Feb 7, 2010 6:51pm
Not sure what pair/TF your chart represents, but here is my commentary, FWIW:

A: big candle following triple top that takes out last 4 lows. Very bearish. Either (i) enter immediately A closes, or (ii) wait for pullback to candle lows within A's body, anticipating 'flipover' S/R, or (iii) otherwise scale in if price retraces upward into A's body, or (iv) wait for horiz line Z to be broken.

B: strong outside bar following small pullback = bearish continuation signal. Possibly look for entry based on flipover S/R, since 3 prior candle lows are almost equal (see line Y).

C: big candle after price has been falling for a while frequently means exhaustion. Think about exiting, or at least scaling out.

D: bearish outside pinbar, probably would have resulted in a loss, depending on where you move SL to BE.

E: bearish candle, another loss if we entered following this candle. However, price is moving sideways, and it's not strongly bearish in terms of taking out prior candle lows.

F: large red candle = bearish. Continuation signal.

G: bearish outside bar = strong continuation signal (just in case we missed F).

H: engulfing body following pullback. Bearish.

J: engulfing body/pinbar off prior S/R line = strong bearish entry signal.

The trend is clearly downward, therefore short trades only. If the chart was a longer TF (e.g. D1), then the bearish continuation signals could have had us looking for high momentum intraday candles, S/R confluences etc on shorter TFs, thus getting multiple TF confirmation.

@Sim: I use a strength indicator to help pick candidate pairs to trade (explained here). There are plenty to choose from, and as long as there's money flowing from one country to another, something will be trending. So hopefully no need to wait several days between possible signals.
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  • #52
  • Feb 7, 2010 7:19pm Feb 7, 2010 7:19pm
Nice analysis. Thanks. I think this thread can really become significant...there's nothing like this sort of situational analysis as opposed to picture after picture displaying the desire to find the most prudent patterns...because actual trading is nothing like that.. as I learn every day You find the opportunity and link it with the bigger picture
  • #53
  • Feb 7, 2010 7:35pm Feb 7, 2010 7:35pm
Quoting hanover
Not sure what pair/TF your chart represents, but here is my commentary, FWIW:

A: big candle following triple top that takes out last 4 lows. Very bearish. Either (i) enter immediately A closes, or (ii) wait for pullback to candle lows within A's body, anticipating 'flipover' S/R, or (iii) otherwise scale in if price retraces upward into A's body, or (iv) wait for horiz line Z to be broken.

B: strong outside bar following small pullback = bearish continuation signal. Possibly look for entry based on flipover S/R, since 3 prior candle lows are almost...


Great analysis Hanover. Right on the money. We have the same ideologies.
Im glad to See there are more people that think the same way. This is a daily chart of the eur/usd showing most of this year.
  • #54
  • Feb 16, 2010 5:39pm Feb 16, 2010 5:39pm
Today's Bear TRAP!!!!

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Midnights 4hr bar told us a story of a falling market. Reversal bar that seems perfect as it fails to make new highs . WOAh then guess what happened when all the shorts were initiated 3 pips or so under the bar. A REVERSAL BAR FAILURE! Watching the price action at the low of the bar was crucial to avoiding this bear trap.

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when the market tries to do something a couple times and fails it does the opposite.

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Today's strategy would be to pick up the pull backs on a 1 mins time frame. You basically could have entered at any time with a appropriate stop loss and rode the market up all day. Price never even broke its trend line when this happens you know its a monster trend for the day at least.

Exit would have been when the trend line was broken for a whopping 100 pip rally today!
  • #55
  • Feb 16, 2010 5:42pm Feb 16, 2010 5:42pm
moneyyyy,, did u ride it mate?
  • #56
  • Feb 16, 2010 6:52pm Feb 16, 2010 6:52pm
Quoting Sim
moneyyyy,, did u ride it mate?
My signal alarm went off after i was out the door. Damn i need a cell phone with metatrader.

I love how the best moves happen from 6am to noon in EST basically when my work day begins.

If they allowed trailing stops with my broker i would have just let it ride from and entry order placed where my alarm was.

There will be more good trades you kinda cant beat your self up for it. I just need to be able to watch the market during peak hours. Something is going to have to give either spend less hours working or trade. Right now working is the path of least resistance.
  • #57
  • Feb 16, 2010 6:54pm Feb 16, 2010 6:54pm
yesss do with the chaos not against it!
  • #58
  • Mar 22, 2010 6:22pm Mar 22, 2010 6:22pm
anybody here?
  • #59
  • Mar 22, 2010 8:41pm Mar 22, 2010 8:41pm
Quoting judith
anybody here?
No.
  • #60
  • Mar 26, 2010 10:28am Mar 26, 2010 10:28am
Quoting judith
anybody here?
HI!
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