Higher Edge within a Single Candlestick

"I can see the higher edge within a single candlestick and the future candlestick. I can see where the higher probabilities lies within a single candlestick and the future candlestick."

""95% of the time price will close above or below the open." Amateurs will never see the edge in this quote, unless a professional point it out where the edge lies within this quote."

http://www.forexfactory.com/showthre...34#post4690034


So there is an edge within a single candlestick. There are higher probability trades within a single candlestick.

The statement that "95% of the time price will close above or below the open" is true. I have that stats to verify that on GU. As yet I have not looked at other currency pairs, as an edge in one pair should be enough.

So what do we learn from this FACT. We learn that from the opening price of any candle we can EXPECT MOVEMENT. What we don't know at this stage is in what direction.

For me to scalp GU within a single candle there needs to be enough movement. For me there is not enough movement in anything lower than a 1hr candle. My stats show than during my chosen hours the average range of a 1hr candle is 22.82 pips. So during each hour I only need to capture some of this range.

It is very interesting. How do you capture some of the range?

My friend, this is for you to explore. Just as I have been.

Look at the facts. You now know that from a 1HR GU candle open you are almost guaranteed to get movement in some direction away from it. Don't take my word for it. How do you go about proving this for yourself?

What is the range of the candle? I know that more than 95% of the time the OPEN will be either higher or lower than the CLOSE.

However the OPEN to CLOSE is not the full range of the candle. Often a candle has wicks on both sides that show the real range of price movement during that candle period. So we are not limited to capturing the movement between the OPEN and CLOSE of the candle. So more often than not we can expect movement which is more than the movement between OPEN and CLOSE.

What can historical OHLC data tell us about the probabilities within an individual candlestick? Where can I make high probability entries? When do I need to get out? How big should my Stop Loss be?

These are questions I have been finding answers to. This enables me to capture some of the move within a candlestick. If I get it wrong I know when to get out for a relatively small loss compared to the potential gain.

True. Thats how I compiled mine manually for my favourite pair. Posted the movements in one of my thread.

Armed with my intimate knowledge of 1HR GU candles I also like to know what is happening under the hood.

Therefore I have a 1HR candle super-imposed on an M1 chart. This helps me to see the movement within each 1HR candle.

Great. I think it is a process that each trader must go through for themselves to understand the market they are trading more fully. Something that I previously overlooked.

If anyone wants to use this thread to share stats they have on candlesticks for various pairs. Please feel free. My focus is still GU.

Just want to clarify something with regard to this post. When I am looking "under the hood" I am not looking for patterns. I don't believe in them. In my own experience I would look for various patterns in relation to S/R points but found that these failed just as often as they succeeded and were unreliable.

I like to see the m1 price movement in relation to my chosen reference point. The reference point keeps me grounded.

As you can see from my explorer I do set a SL but don't like to set a TP. I like to keep that open to expose my trade to much larger movements in my direction if the force is with it.

I prefer looking at the weekly candle only and then sometimes at the daily candle within that week.

Keeep it up !

Interesting topic and discussion.
Keep talking.

Hmmm...

I think I have posted everything I wanted to share so far.

I decided to remove my demo explorer but just for your info it is still doing just fine...



I think I may just abandon it now anyway as it serves no real purpose other than for testing out ideas.

Any more hints? I think entries and exits are important. You always have movement, 95% of time OPEN≠CLOSE. But how do we know when to place our entries,stops, when to cash profits? Price can go 50 pips below open, then spike upwards and close 100 pips above open. We can have unlimited variety of scenarios between the open and close and how does it help us to know where what ? Or we just enter at the open and close at te close and pray for a profit? Obviously you are not doing that but with so many things missing and not much of a description, I really dont know how we can even guess. How do we know when to establish our position and where the stop wont be hit? It still needs a guessing of turning points, I dont imagine any other way to make consistently profitable trades. Market is way too efficient to allow just buying above open and selling below open to make profits. Your reference point could give a bias, but bias is not a system to trade. It is not very difficult to have a reference point, you can buy and sell above/below some moving average or whatever. What is the difference? A moving average shows us what happened. Current candle, before closing, also shows us what already took place, not what happens next. Would be nice to share something more than a quote and nice looking equity curve, perhaps hints regarding entries/exits/stops? Thanks.

What more hints do you want?

Use bigger timeframes and trade the direction. Advanced traders can also trade the movement back from the wick by using a daily candle within the week.

Start small and increase the size if needed.

Contrary to what you might think, I did share more than a quote and a nice looking equity curve.

For me on this forum we have to accept that because of the way the world is there will be things that people discover that they will want to keep to themselves and with good reason. That is a FACT. People are kind enough to drop hints and it is up to us to evaluate and study for ourselves to see if there is anything in what they say. Yes sometimes it will be a load of rubbish and will send us down a wrong path. Often we can spot these based on our own experience and knowledge that we have picked up over the years. We don't need to risk hard-earned money on every idea that comes along. It will cost us time yes but often we grow from the experience. Maybe what I am saying in this discussion is a load of rubbish. Only I know what I have seen and so will other posters who take the time to explore what has been said.

My time on FF has been spent evaluating and getting involved in discussions to determine how I can be successful in trading. I have tried all kinds of things many of which failed and did not work. Some of that is possibly down to me.

CP has been the most thought-provoking poster that I have come across. He did not have to share his research and I am grateful that he did. A lot of what he said rang true with me based on my previous experience. To be consistent and continue to profit from these markets we need to develop systems with an edge that will work in all conditions. From his examination of the market he gave us a fact that never changes through time. As he said it seems mundane and most people will dismiss it as stating the obvious and of no value. But what else can you learn? Yes, sometimes the movement from open will not be enough to profit. We have it within our control when to trade and when not too. As he also said we don't know when buyers/sellers are going to come in. We can only react to what we see. Cut losses when you need to. Cutting losses before they get big is something we can control and contributes to our edge. Sometimes we will be in a profitable trade and it sharply reverses into a losing position. Are you going to keep on holding it expecting it to go in your favour? We know that if we can keep losses small and are wins bigger we can lose more trades then we win and still be profitable. That is another FACT. What else do you learn from the statement in the opening post. CP must have used historical data to prove that to himself. How else would he know? Yes he does not use historical data when he trades but he must have used it to find out various facts about his chosen market to give him the confidence to say such things. What other facts can we learn from historical data that we can apply to our trading of individual candlesticks.

I will not reply to PMs as everything I wish to share is here. Move on if you see no value or if you feel there is not enough detail.

I have shown in a few days what is possible by trading an individual candlestick. Will this work out over time? Well looking at this weeks daily GU candles it has hardly been a trending week and that is often the most difficult time. Most people can make money when markets are trending. Time will ultimately be the judge but I am confident based on what I know that I am heading in the right direction as I am not trying to fight the market but based my system on things that have not changed over time.

​

Great post

Hi, Neio

Thanks for creating a interesting thread. I don't trade candlestick patterns but it has given me some food for thought.

MT

Very valuable thread Neio. Sent me on a hunt and I found much treasure!!!

Sis.yphus

This is a VERY great tool...


Thanks

Could you answer me - how do i chose the direction of the trade and does it matter what direction I chose? Candles can change while they havent closed, many candles are going for the buy scale and end up red and vice versa. How does it affect our decisions and does it.

Have you found any edge in a single candlestick ? If yes, how long have you been using it if you dont mind. Im asking cause when reading your first post you seem to imply that there is an edge cause cp said it or maybe im wrong.