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Candlestick Trading

  • #1
  • First Post: Dec 24, 2010 9:34pm Dec 24, 2010 9:34pm
The objective is to not only focus on candlestick formations, but also s/r levels and breakouts. Our goal is to catch the swinghigh in a downtrend and swinglow in an uptrend. Pinbar reversals are very reliable indications of a reversal, well, pinbar followed by a condle going in the opposite direction of the swing. I will be submitting many chart examples because I believe that's the best way to learn. Now, I'm no expert here so your inputs and arguments are most welcome. I trade 15m charts up to daily. The higher timeframes give more acurate information as to where price is going.
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  • #2
  • Dec 24, 2010 9:45pm Dec 24, 2010 9:45pm
Make sure you look for these and study them, Look through you charts and get used to finding these formations. Once you naturally find them, move on to the next ones, which i will post soon
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  • #3
  • Dec 24, 2010 10:06pm Dec 24, 2010 10:06pm
In this pattern, the candle must engulf the previous candle(the wicks/shadows need not be engulfed)
Remember, we are still in the "Reversal Patterns" chapter so all these must happen at the swinghigh or low for it to be reliable, we'll get to the continuation patterns later.
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  • #4
  • Dec 24, 2010 10:32pm Dec 24, 2010 10:32pm
This patterns are when a candle goes past half of the previous candle in the opposite direction
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  • #5
  • Dec 24, 2010 10:38pm Dec 24, 2010 10:38pm
Whenever a candlestick pattern occurs, I usually don't worry about the trend(which is aggressive). If the pattern benefits the current trend, then it is more powerful and reliable. If you are a conservative trader, then ONLY get in the trade when you intend on going in the direction of the trend. For example, in a downtrend, try to short the swing highs....in an up trend long the swinglows.
Some use moving averages to give a better visual indication. In a downtrend, the candles should be close to the moving averages(30-50 ma) to make a down move, and vice versa.
  • #6
  • Dec 24, 2010 11:00pm Dec 24, 2010 11:00pm
Ok guys and gals,
The assignment is:
Go to your charts and look for these patterns, study them. You will be surprised how often they were right in front of you all this time, you just weren't looking.
I will be back soon and will be talking about breakouts and how to estimate your profit targets or exit points.
Remember, having too many indicators on your chart will distract you from seeing real price action. Indicators can be helpful, but I recommend you don't use them as primary tools. Use your trend lines, s/r lines which I will explain when I come back, included in this will be: Triangle, rising wedge, falling wedge, double tops, three rivers, three mountains and trend breakout patterns.
Thank you for reading and I hope I am helping some of you at least.
Happy holidays
  • #7
  • Dec 24, 2010 11:24pm Dec 24, 2010 11:24pm
Hi Franklin, you have the beginnings of a beautiful thread here.

Don't want to be a wet blanket but I can find these patterns all the time in retrospect.

What I would like is a lesson or two on finding them on the right hand edge.

Just a suggestion but how about taking one pair and following it maybe daily? or failing that I would be happy to post a daily pic for your comments. I may also put my own comments as an exercise.
  • #8
  • Dec 24, 2010 11:31pm Dec 24, 2010 11:31pm
Quoting Phreddy
Hi Franklin, you have the beginnings of a beautiful thread here.

Don't want to be a wet blanket but I can find these patterns all the time in retrospect.

What I would like is a lesson or two on finding them on the right hand edge.

Just a suggestion but how about taking one pair and following it maybe daily? or failing that I would be happy to post a daily pic for your comments. I may also put my own comments as an exercise.
Hi Phreddy,
Yes, that sounds great. I will be posting some live entries in the very near future, this could definitely help many. Your input is very welcome here and any exercises you post I will be happy to check out. I am always open to learning new things. Thanks.
  • #9
  • Dec 24, 2010 11:55pm Dec 24, 2010 11:55pm
Quoting franklinX
Ok guys and gals,
The assignment is:
Go to your charts and look for these patterns, study them. You will be surprised how often they were right in front of you all this time, you just weren't looking.
I will be back soon and will be talking about breakouts and how to estimate your profit targets or exit points.
Remember, having too many indicators on your chart will distract you from seeing real price action. Indicators can be helpful, but I recommend you don't use them as primary tools. Use your trend lines, s/r lines which I will explain when...
I personally believe that price action is the best indicator since it is what the market tells you right now.
Waiting for your further explaination and thank you very much for sharing it with us at FF
  • #10
  • Dec 25, 2010 12:48am Dec 25, 2010 12:48am
Quoting franklinX
Hi Phreddy,
Yes, that sounds great. I will be posting some live entries in the very near future, this could definitely help many. Your input is very welcome here and any exercises you post I will be happy to check out. I am always open to learning new things. Thanks.

i cant wait...
  • #11
  • Dec 25, 2010 1:18am Dec 25, 2010 1:18am
Since there is no trading for the moment, its a chance to try the posting of charts:
€$ is bumping along on some resistance it appears;
£$ likewise;
$Cad on a down trend heading into SR;
$CHf is bouncing up off of resistance;
$Y on a downward trend but right on resistance;
AU$ on an up trend and maybe breaking resistance.

Maybe I should add resistance lines for monthly and weekly TFs?
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  • #12
  • Dec 25, 2010 3:55am Dec 25, 2010 3:55am
Hi franklinX

Sounds like the start of a great thread. Im glad im at the start !!

Im going to check:

a, pinbar entries with the accompanying candle for direction
b, use the 30 sma

on a 15 min timeframe


2. Im not too sure on what the other formations are (englufing candles and clouds seem to confuse me) - any other help on those formations ?

Monk
  • #13
  • Dec 25, 2010 5:03am Dec 25, 2010 5:03am
Quoting franklinX
The objective is to not only focus on candlestick formations, but also s/r levels and breakouts. Our goal is to catch the swinghigh in a downtrend and swinglow in an uptrend. Pinbar reversals are very reliable indications of a reversal, well, pinbar followed by a condle going in the opposite direction of the swing. I will be submitting many chart examples because I believe that's the best way to learn. Now, I'm no expert...
nice thread brother,,

me, as a beginner will often post here to get a simple trading system

all this time I also trading with the SnR System,
I hope this thread will also be many benefits,
only an analysis, and I'm always wrong, don't follow me,
  • #14
  • Dec 25, 2010 5:23am Dec 25, 2010 5:23am
Quoting TheMonk
Hi franklinX

Sounds like the start of a great thread. Im glad im at the start !!

Im going to check:

a, pinbar entries with the accompanying candle for direction
b, use the 30 sma

on a 15 min timeframe


2. Im not too sure on what the other formations are (englufing candles and clouds seem to confuse me) - any other help on those formations ?

Monk
Here's an example:
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  • #15
  • Dec 25, 2010 10:25pm Dec 25, 2010 10:25pm
Here is my assessment of £$ for the last ten days and how we would have made money from trading the candles.

First an engulfing: A sell on the next open would make 229 pips with a risk of 90 if the open of the E candle was used.

Next, another engulfing after a pull back: Risk 115 and perhaps made 3 probably eaten up with the spread.

Third, the pinbar from the last trade was engulfed and made 75 from a 45 risk.

Last, an inside bar. A straddle there would have made BE.

What does the final pin bar indicate?
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  • #16
  • Dec 26, 2010 4:13am Dec 26, 2010 4:13am
Quoting Phreddy
Here is my assessment of £$ for the last ten days and how we would have made money from trading the candles.

First an engulfing: A sell on the next open would make 229 pips with a risk of 90 if the open of the E candle was used.

Next, another engulfing after a pull back: Risk 115 and perhaps made 3 probably eaten up with the spread.

Third, the pinbar from the last trade was engulfed and made 75 from a 45 risk.

Last, an inside bar. A straddle there would have made BE.

[b]What does the final pin bar indicate?[b]
you would like a different type of pin at swing low, the one that points to reversal. here its not

the reversal patterns should be found at swing hi/lo. continuation patters are ok but not as profitable as reversal patters
  • #17
  • Dec 26, 2010 4:56am Dec 26, 2010 4:56am
Quoting roundrock
you would like a different type of pin at swing low, the one that points to reversal. here its not. the reversal patterns should be found at swing hi/lo. continuation patters are ok but not as profitable as reversal patters
Thanks for that RR...so this one is a continuation? The pin is a bit of a retrace ready to carry on up? We need to buy?
  • #18
  • Dec 26, 2010 5:40am Dec 26, 2010 5:40am
Quoting Phreddy
Thanks for that RR...so this one is a continuation? The pin is a bit of a retrace ready to carry on up? We need to buy?
yes, its a continuation pin.

pl note the pins that you see on friday are less than relaiable as some profit booking goes on here on some very low volumes. so be careful. also the size the pin w.r.t the wide bar adjucent is small. so easy pass for me
  • #19
  • Dec 27, 2010 7:27pm Dec 27, 2010 7:27pm
I am a bit isolated here in Penang, didn't realise that trading had restarted yesterday. Thought that the world was still on holiday and that nothing was happening until into January.

So, missed yesterday's chart and late for this morning's one by three hours.
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  • #20
  • Dec 27, 2010 8:57pm Dec 27, 2010 8:57pm
Roundrock brought to our notice the 'continuation pin bar'.
Looks like most of the pairs have them....and behaving as expected.

I am not concerned with the fact that it is holiday time and we should not be trading, just the picture that we get from the candles.

So...what about the pink PB on EUR/USD some four or five days back?
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