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Candlestick Analysis - Do You Use It?

  • #21
  • Jun 19, 2010 11:22am Jun 19, 2010 11:22am
Quoting east
Hello I have a question about candles.

I am reading Steve Nison's Book Japanese Candlestick Charting Techniques.

I am not too sure how/what is the difference, between white real body, and dark real body.

Thanks for your help on this one
Light real body = close was higher than the open
Dark real body = open was higher than the close

light = price went up
dark = price went down
  • #22
  • Jun 19, 2010 2:31pm Jun 19, 2010 2:31pm
If any traders want to take a really good look at Steve Nison's stuff, then go to www.forex-book.org

Here you can download, for free, the following:

Profiting in Forex
Beyond Candlesticks
The Candlestick Course
Japanese Candlestick Charting Techniques.

When you download, it may ask for a password. Just type in the full web address for the site.

I found after studying them, they gave me a much better understanding of what the patterns mean, and also my trading improved, mainly keeping me out of some crappy trades i would have taken before.

Hope this helps.
  • #23
  • Jun 19, 2010 2:33pm Jun 19, 2010 2:33pm
http://intelligenttradingtech.blogsp...k-pattern.html
The breaking of a wave cannot explain the whole sea.
  • #24
  • Jun 19, 2010 4:20pm Jun 19, 2010 4:20pm
Quoting TEB63
... Candle Formations .. 3 Candle Reversal .. With Pin Candle

One of my favourite candle formations is the 3 candle reversal .. variation with a big pin candle (nose or tail)
The “Pin” is the big shaddow on the 2nd candle in the formation. I call them “nose or tail”. .
[size=3][color=#000000](ie. The chart I am using is an up trend: Reverse everything...
What you've taken great pains to describe here is an evening star (or morning star) formation...with a few added personal touches...It nothing new or "invented" by anyone here. These patterns have been used for more years than I have on this earth...

Like I've said before it pays to go back to the original source...if you want to use price action, learn candle sticks...its NOT hard at all...then you can "personalize" to your particular trading style. even Mr. Nison says that trading should NOT take place based solely on price action signals, but rather with a confluence of signals including price action, support/resistance, fibo levels, and yes even oscillators.
  • #25
  • Jun 19, 2010 5:36pm Jun 19, 2010 5:36pm
Quoting gspajon
What you've taken great pains to describe here is an evening star (or morning star) formation...with a few added personal touches...It nothing new or "invented" by anyone here. These patterns have been used for more years than I have on this earth...

Like I've said before it pays to go back to the original source...if you want to use price action, learn candle sticks...its NOT hard at all...then you can "personalize" to your particular trading style. even Mr. Nison says that trading should NOT take place based solely on price action signals,...


what are you trying to say here?
I never said I came up with it,
just that I use it, and here is how I use it.

as the bible says "... nothing is new under the sun.'

it goes very well with the system I use of which I give some of it away here on FF for free..

I was trying to help people.

teb
[email protected]
  • #26
  • Jun 19, 2010 5:44pm Jun 19, 2010 5:44pm
Quoting TEB63
what are you trying to say here?
I never said I came up with it,
just that I use it, and here is how I use it.

as the bible says "... nothing is new under the sun.'

it goes very well with the system I use of which I give some of it away here on FF for free..

I was trying to help people.

teb
[email protected]
the bible also says, "Let he who is without sin cast the first stone..." I never meant to "accuse" you or anyone else of anything much less inventing or not inventing something. I'm sorry you were offended as that was certainly NOt my intention...I appologize.

I merely meant to point out that a thorough study of candles is best accomplished by going as close to the original source as possible. Trading is very personal as each individual is unique and intreprets the market differently.

the originator of this thread clearly wants to learn but may receive multiple interpretations of the same material based on each person's view. This can be confusing and at times frustrating. Thus "go to the source" and decide how it best works for you...THEN add you personal touches as you have clearly done to make it your own.

No insult intended or implied...I'm sorry my words invoked a negative response...hope you understand.
  • #27
  • Jun 21, 2010 7:51am Jun 21, 2010 7:51am
by the way
tomorrow I will be sending out THE STRONGEST candle formation
to my mailing list

if you want to be on my list

email me at
[color=#22229c][email protected][/color]


tebhttp://cdn.forexfactory.com/images/s...m/big_grin.gif
  • #28
  • Jun 22, 2010 9:21am Jun 22, 2010 9:21am
Hello can you post a chart to show what you are talking about.

http://cdn.forexfactory.com/images/s...n/post_old.gif Jun 19, 2010 9:30am
http://cdn.forexfactory.com/nfs/cust...tar32833_5.gif TEB63


Thank you
  • #29
  • Jun 22, 2010 9:44am Jun 22, 2010 9:44am
Quoting TEB63
candles are the very best tool in trading
as they are the most basic
each candle is a "chart"
candles with trend and S/R lines are the very best way to trade

they are like the letters in a book
its how you use them are you shakespeare are a monkey...


Hello the chat is gone, is there any way to upload it again??

Thanks
  • #30
  • Jun 22, 2010 8:05pm Jun 22, 2010 8:05pm
Quoting east
Hello the chat is gone, is there any way to upload it again??

Thanks

its back at post 19
teb
  • #31
  • Jun 23, 2010 9:22am Jun 23, 2010 9:22am
Quote
its back at post 19
teb

Its seems not
  • #32
  • Jun 23, 2010 9:25am Jun 23, 2010 9:25am
this is what I get>..

http://javascript<b></b%3E:;





this is on firefox
  • #33
  • Jun 23, 2010 9:38am Jun 23, 2010 9:38am
upload on www.casimages.com and post the link
  • #34
  • Jun 25, 2010 3:46am Jun 25, 2010 3:46am
Quoting soso
In fact, I'll start writing a test EA. I'll get back with the results.
Hi David,

I implemented an EOD backtest in MT, the EA setup is as follows:

- A position is opened at market price at the first tick of the next candle following the setup candle. (Here it can be a bit different than yours if there are gaps between close/open).
- An open position is closed at market price after 5 trading days.
- A Hammer Setup is defined valid if:
1) Open > Close
2) Lower tail at least 3 times larger as body
3) Lower tail at least 3 times larger as higher tail
- Viceversa for Shooting Star Setup (bearish hammer).

I highlighed what could be different than your test: 2 additional conditions that make the setup candle "more" bullish resp. bearish.

I started with an account of 10000USD, each position is 1 minilot and start date is 2005.01.01.

It finished a bit above 10000, a profit factor of 1.19. See details below.

Will now start to create a real trading system around it. At least this is the basic idea.

Cheers.
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Trading = a mirror to your human flaws. Fix them or be fixed.
  • #35
  • Jun 25, 2010 5:46am Jun 25, 2010 5:46am
Hi there,

Sorry I haven't been on this thread for a while. I don't like to start threads and leave them, I just got called away on business at the last minute and couldn't help it.

Anyway soso, I agree that your extra conditions make the candles slightly more bullish/bearish than mine. Another condition to make the candles more bullish or bearish might be to say that the body had to be, say, at least 25 pips and the tail at least three times that. If the price closes within a few pips of where it opened then a tail of at least three times the body doesn't actually have to be very big at all. Or you could say that the side of the tail you're using has to be at least 100 pips long, or something like that?

Another thing you could do might be to look at the longer term trend, by saying did the price open higher or lower than it did 3 months ago. Then these candles might signal in such a system that a short term move was coming to and end and the price was moving back to the direction of the longer term trend (i.e. a candle in the direction of the long term trend might signal the end of a correction, which could be useful).
  • #36
  • Jul 26, 2010 4:28pm Jul 26, 2010 4:28pm
I need clarification here. Candlestick by all means is formation of an opening and closing the price action on that particular time frame, and can be prove more accurate in stock market than forex. My question is, what is the best data feed (by broker server time) to translate the most accurate price action in forex market as a whole? Different broker will end up with slightly different CS pattern by the end of the day because their of server starting time.
  • #37
  • Jul 26, 2010 8:11pm Jul 26, 2010 8:11pm
Quoting mtvortex
Different broker will end up with slightly different CS pattern by the end of the day because their of server starting time.
If you understand the underlying action, the difference in the CS pattern won't matter. This is why I would emphasis thinking of a candle in terms of what it represents (and then consider context), rather than just trading because you see a doji.

A price chart is essentially a story, and the candles are the words. The better we understand the words, the better we understand the sentence. When we can put the sentences together, we start to understand the story. If we have a good knowledge of stories, phrases, sentence structure, and grammar, we can get an idea of what the next word or sentence may be, and how the story might develop.
  • #38
  • Last Post: Jul 26, 2010 11:57pm Jul 26, 2010 11:57pm
Quoting Mr J
If you understand the underlying action, the difference in the CS pattern won't matter. This is why I would emphasis thinking of a candle in terms of what it represents (and then consider context), rather than just trading because you see a doji.

A price chart is essentially a story, and the candles are the words. The better we understand the words, the better we understand the sentence. When we can put the sentences together, we start to understand the story. If we have a good knowledge of stories, phrases, sentence structure, and grammar, we...
This I agree with you. Each CS's open of close can be rapidly changed in the last second of what ever time frame you are looking at, therefore to analysis every single CS does not provide enough information about the "story". Its the virbration they create, the pattern of formations (grammar, phrases etc..). I stared at the ticker for days until the point i realize candles hide much more then they show.
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