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There is No Edge in a Single Candlestick

  • #41
  • Apr 6, 2015 5:14am Apr 6, 2015 5:14am
Quoting BillYon
{quote} I thought this all would be a healthy debate on perspective. Everyone chill out!!! I look at using the 1 hr as confirmation, the same as I look at placing a horizontal line ahead of price in both directions. Still a single candle. Both must be red/green, same candle (daily), at the same time, be it segmented down or not. Still will be in a direction against the higher timeframe's open. Wrapped in your trading plan and you have momentum trading based on a single candle. You disagree? The argument seems to be if there is a edge in trading...
Few questions before I agree or disagree :

1. 1hr as confirmation of what, of the 1D tf ?
2. Horizontal lines based on what ? random ? specific distance above/below price ?
3. what do you mean by "Still will be in a direction against the higher timeframe's open", does this means sell higher than open and buy lower ?
No guts, no glory
  • #42
  • Apr 6, 2015 5:34am Apr 6, 2015 5:34am
Quoting abokwaik
{quote} Few questions before I agree or disagree : 1. 1hr as confirmation of what, of the 1D tf ? 2. Horizontal lines based on what ? random ? specific distance above/below price ? 3. what do you mean by "Still will be in a direction against the higher timeframe's open", does this means sell higher than open and buy lower ?
1. The hour is just zooming into the daily candle. So to confirm direction on daily, use a tighter lens (1hr).

2. Lines based on whatever! Just some space away from current price to show direction and plan trades around.

3. If the 1hr and the daily must be green at the same time, the higher timeframe's open leads the way. Buy/sell in the direction price travels away from the open. Use lower timeframe for entry confirmation.

Both turn green and cross your line, no news and whatever extra filters you like. Enter and ride momentum based on your trade management plan that cut losses short and let winners run or whatever gives you moola. You are inherently trading the active trend.
Solutions ONLY!!!
  • #43
  • Apr 6, 2015 5:39am Apr 6, 2015 5:39am
Quoting abokwaik
I see no edge in a single candlestick. Open price is the least significant price compared to High, Low and Close Prices. Open price will get broken up and down several times in a candlestick lifetime, and is rarely respected. Lows and Highs are the areas of interest to me. They represent possible future paths for price, when broken or respected, and all this in a formation of candlesticks, not a single candlestick which does not mean anything on its own. This is the recent price action for GBP/USD H1 over the last 2 weeks. Which do you think is...
Hello sir.
I personally would disagree with your comment. Only reason being is because 1 candle will give you the only "tangible" thing you can use in forex. That "thing" would be a confirmed reversal or confirmed extension. I have noticed that you are using a higher tf chart, but no matter what tf you use, one candle always boils down to extension or reversal. Our bias leads aways from being able to identify the true purpose of what a candle is, thus limiting our ability to make trades based on how the banks do so.
Everything in life has a "counter". Especially in forex.
  • #44
  • Apr 6, 2015 5:43am Apr 6, 2015 5:43am
Quoting BillYon
{quote} 1. The hour is just zooming into the daily candle. So to confirm direction on daily, use a tighter lens (1hr). 2. Lines based on whatever! Just some space away from current price to show direction and plan trades around. 3. If the 1hr and the daily must be green at the same time, the higher timeframe's open leads the way. Buy/sell in the direction price travels away from the open. Use lower timeframe for entry confirmation. Both turn green and cross your line, no news and whatever extra filters you like. Enter and ride momentum based on...
I agree on 1 and 3. Assuming that when you say the candle is green, it is after the candle has completed (after close).

As for 2, your plan should be clear: i.e. x pips above previous candle's high, y pips below previous candle's low ... etc.
No guts, no glory
  • #45
  • Apr 6, 2015 6:02am Apr 6, 2015 6:02am
Quoting PaulJames
{quote} Hello sir. I personally would disagree with your comment. Only reason being is because 1 candle will give you the only "tangible" thing you can use in forex. That "thing" would be a confirmed reversal or confirmed extension. I have noticed that you are using a higher tf chart, but no matter what tf you use, one candle always boils down to extension or reversal. Our bias leads aways from being able to identify the true purpose of what a candle is, thus limiting our ability to make trades based on how the banks do so.
Hello sir,

Can you show us some examples of lets say a 5-min candle that showed you a ​confirmed reversal or continuation on its own.

P.S. I wish I can make trades like banks do.
No guts, no glory
  • #46
  • Apr 6, 2015 6:05am Apr 6, 2015 6:05am
Quoting abokwaik
{quote} I agree on 1 and 3. Assuming that when you say the candle is green, it is after the candle has completed (after close). As for 2, your plan should be clear: i.e. x pips above previous candle's high, y pips below previous candle's low ... etc.

If candle closes then you are not trading the active candle. This also has an edge. Both ways do!

In the end you are always only trading Horizontal line breaks or reversals from thereof. There are no guarantees after entry if so we would all be rich doing breakouts of high/low trading which is still a line in the sand above/below price.

What you are saying is historic breaks/reversals give higher edge than an arbitrary reference line in the sand, but is this so? I'd say it's an illusion that swallows the hard earned funds of many traders.

The plan that should be clear is your trade management plan...

"Cannot guarantee average pips, only average losses"...TRO
Solutions ONLY!!!
  • #47
  • Apr 6, 2015 6:12am Apr 6, 2015 6:12am
Quoting BillYon
{quote} If candle closes then you are not trading the active candle. This also has an edge. Both ways do! In the end you are always only trading Horizontal line breaks or reversals from thereof. There are no guarantees after entry if so we would all be rich doing breakouts of high/low trading which is still a line in the sand above price. What you are saying is historic breaks/reversals give higher edge than an arbitrary reference line in the sand, but is this so? I'd say it's an illusion that swallows the hard earned funds of many traders. The...
Is your method just throwing some h-lines randomly around the active candle ?
And how do you judge if the active candle is red or green while it might change its color any time, multiple times during its life cycle ?
No guts, no glory
  • #48
  • Apr 6, 2015 6:27am Apr 6, 2015 6:27am
Quoting abokwaik
{quote} Is your method just throwing some h-lines randomly around the active candle ? And how do you judge if the active candle is red or green while it might change its color any time, multiple times during its life cycle ?

You don't need to judge. Trade what the market gives you. If it's going up towards your reference take longs on the cross and vice versa for shorts.

Many red bars are also green on different timeframes. Trade what you see. The open/close/high/low is just a starting point. Not the trigger.

I trade many methods. Including what you present but usually on the weekly breaks

It's my management plan that wins the pips not my h-lines
Solutions ONLY!!!
  • #49
  • Apr 6, 2015 6:32am Apr 6, 2015 6:32am
Quoting BillYon
{quote} You don't need to judge. Trade what the market gives you. If it's going up towards your reference take longs on the cross and vice versa for shorts. Many red bars are also green on different timeframes. Trade what you see. The open/close/high/low is just a starting point. Not the trigger. I trade many methods. Including what you present but usually on the weekly breaks It's my management plan that wins the pips not my h-lines
Good luck BillYon, if its works for you I am happy.
No guts, no glory
  • #50
  • Apr 6, 2015 6:42am Apr 6, 2015 6:42am
Quoting abokwaik
Referring back to GBPUSD, H1, example chart posted on 1st post, and updated with today PA as below. {image} Why price would go down to "test" 1.486x, or go up and "test" 1.498x. "test" here means bounce or break. Those are the closest areas of interest for the price at the moment. 1.486x represents a cluster of shorts who : Still think the major down trend will continue Have wide stops Will average on a higher price/or already averaged at a higher price It also represents a cluster of longs who : Think that the major trend is reversing, or an up...
On the GBP/USD H1 example chart the price is now approaching 1.498x (currentlt at 1.4963). Lets see how it will behave around 1.498x area.

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDH1.png Size: 74 KB


EDIT : Of course it needs to Close above 1.4953 area first.
No guts, no glory
  • #51
  • Apr 6, 2015 7:08am Apr 6, 2015 7:08am
Quoting abokwaik
{quote} On the GBP/USD H1 example chart the price is now approaching 1.498x (currentlt at 1.4963). Lets see how it will behave around 1.498x area. {image} EDIT : Of course it needs to Close above 1.4953 area first.

1.4953 has made pips on the cross...
Solutions ONLY!!!
  • #52
  • Edited 7:43am Apr 6, 2015 7:31am | Edited 7:43am
This is my pending sell limit order.

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDH1.png Size: 121 KB


This account is already have a TE shared on my profile "Metals_Basket_Demo" which I use to trade metals basket on, but put this order as an example only.

EDIT : So far price looks SHY of the 1.498x level, as I mentioned earlier this could be a bear area that they are willing to defend. If broken might lead to 1.516.
No guts, no glory
  • #53
  • Edited 12:23pm Apr 6, 2015 7:54am | Edited 12:23pm
Quoting abokwaik
{quote} Hello sir, Can you show us some examples of lets say a 5-min candle that showed you a ​confirmed reversal or continuation on its own. P.S. I wish I can make trades like banks do.


My pleasure... Based on the method which I use. I simply await accumulation on the 5m chart.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: accumulation.PNG Size: 30 KB
Click to Enlarge Name: trigger.PNG Size: 29 KB
Everything in life has a "counter". Especially in forex.
  • #54
  • Apr 6, 2015 8:25am Apr 6, 2015 8:25am
Quoting PaulJames
{quote} My pleasure... Based on the method which I use. I simply await accumulation on the 5m chart. {image} Once the accumulation has been confirmed, I then mark the high and low of the accumulation and simply await for the very next thing. Please understand my mentality of how the market works. Doing so will help you understand the bias I have towards scalping. I believe that instead of shorting at a high, or buying at the low we should await the close across either the high or the low of the accumulation level. Once that occurs like in the picture...
You're analysis is based on the whole chart, not a single candle. And that's the way to do it, I like that.
No guts, no glory
  • #55
  • Apr 6, 2015 9:00am Apr 6, 2015 9:00am
Quoting abokwaik
This is my pending sell limit order. {image} This account is already have a TE shared on my profile "Metals_Basket_Demo" which I use to trade metals basket on, but put this order as an example only. EDIT : So far price looks SHY of the 1.498x level, as I mentioned earlier this could be a bear area that they are willing to defend. If broken might lead to 1.516.
Price reached 1.4980 and started going down, missing my limit order by 3 pips, so what to do now ?
1. Increase the sell limit entry price to above 1.5
2. Trade the break up of 1.4980 by a stop buy order
3. Trade the break down of 1.4853 by stop sell order.
4. keep everything as is.
5. delete the limit order and step aside

Which one whould you choose ?

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDH1.png Size: 43 KB
No guts, no glory
  • #56
  • Apr 6, 2015 9:01am Apr 6, 2015 9:01am
I have chosen number 3.
No guts, no glory
  • #57
  • Apr 6, 2015 9:05am Apr 6, 2015 9:05am
Quoting abokwaik
{quote} You're analysis is based on the whole chart, not a single candle. And that's the way to do it, I like that.

I see. Sorry for misunderstanding your statement.
Everything in life has a "counter". Especially in forex.
  • #58
  • Apr 6, 2015 9:57am Apr 6, 2015 9:57am
The sell order is working fine, and in profit almost immediately after opening.
I am gonna leave it as is, and go home after a long working day.


Regards,


Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDH1.png Size: 41 KB
No guts, no glory
  • #59
  • Apr 6, 2015 11:12am Apr 6, 2015 11:12am
The example trade is reached 1:1 R:R in 2 hours.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_2015-04-06-21-07-32.png Size: 84 KB
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  • #60
  • Apr 6, 2015 11:33am Apr 6, 2015 11:33am
A trader is usually thinks of different options in such situation, unless of course he pre planned and sticks to his plan. Those options might include:

 

  1. Close the whole position before target.
  2. Close partially and move stop to open price.
  3. Keep the whole position and move stop to B.E.
  4. Add to position.
  5. Close partially , move sl to be and and increase target
  6. Stick to the original plan
  7. ... etc.

No guts, no glory
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