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Higher Edge within a Single Candlestick

  • #241
  • Jun 8, 2015 1:57am Jun 8, 2015 1:57am
Quoting russtrader
This is old ... but worth a read .. Interesting read this thread {image}
I did an EA based on this report and the back-testing results are far away from report results.
  • #242
  • Edited 12:14pm Jun 8, 2015 11:31am | Edited 12:14pm
What is market doing?

Candlestick chart
Attached Image


Tick chart
Attached Image


Tick chart zoomed
Attached Image (click to enlarge)
Click to Enlarge Name: 3a.png Size: 16 KB


So, what is market doing?
Moving up and down.
Now looking at this picture of CP
Attached Image (click to enlarge)
Click to Enlarge Name: structure.png Size: 66 KB


How do I know if a move is strong medium or weak?
I should measure something to compare and then say if its strong medium or weak.
From Wikipedia Measurement is the assignment of numbers to objects or events.
In this case what should I measure? I should measure movement.
How?
Maybe I should say 2 pips move in any direction (up or down) without retracement is a weak move.
Medium move is 4 pips move in any direction without retracement.
Strong move is a move > 4 pips in any direction without retracement.
Of course these are my ideas, any different idea?

Alex

EDIT: regarding the scale, you compare two objects so in the market you compare two moves to see which has more power, can I see this as a continuous battle bewteen two moves? Which one will win?!
  • #243
  • Jun 8, 2015 7:48pm Jun 8, 2015 7:48pm
[quote=alexx90;8312952]
well said alex, a movement is a relative value, so just needs a reference point to compare to
do we really need to know it is a strong or weak move?
i think the only thing we need to do is take the pips when momentum is changed
and the momentum should be derived from same reference point i believe
i do not know if this make any sense or not
patience is a virtue
  • #244
  • Jun 9, 2015 1:16am Jun 9, 2015 1:16am
Quoting alexx90
What is market doing? Candlestick chart {image} Tick chart {image} Tick chart zoomed {image} So, what is market doing? Moving up and down. Now looking at this picture of CP {image} How do I know if a move is strong medium or weak? I should measure something to compare and then say if its strong medium or weak. From Wikipedia Measurement is the assignment of numbers to objects or events. In this case what should I measure? I should measure movement. How? Maybe I should say 2 pips move in any direction (up or down) without retracement is a weak move....
Time maybe
  • #245
  • Jun 9, 2015 2:38am Jun 9, 2015 2:38am
Quoting CrucialPoint
Let There Be Light "
CP you're a smart guy, no doubt. You're posts are always interesting but let me tell you this is a fairly trivial ex-post analysis (yourself said this).

No offense intended here, english is not my mother language and didn't want to be rude but AFTER a long bullish candle is easy to state that in lower TF there has been bullish channel, Higher Highs and so on ...

So far everything seems to solve in MTF analysys (scale to lower TF) and keep with the higher TF trend (obviously i miss something here).

What a newbie like me has difficult time to grab is HOW to take advantage efficiently IN THE MOMENT of movement development ...

Of course it's your good right to keep this very well hidden from other eyes or at least not completely spoon-feeded on a forum, i understand
  • #246
  • Jun 9, 2015 4:02am Jun 9, 2015 4:02am
Why do some people understand the basics and some don't?
For me there is a part of luck and a part of education, I need to fix my education. :nerd:

Quoting NaughtyPip
Time maybe
If concluded that price is time indipendent, why should I use time then?
Anyway, let's say that the way is time, how? what can I measure with time?

One more thing.
We all know that price moves up and down in a casual way. For casual I mean it doesn't follow a fixed scale for example, every price change of 1 pip from previous. No, it doesn't work this way. From 1.5004 next price can change to 1.5003 or 1.5010. There is space between one price and another, is this space relevant?
Is there a difference from these 2 following moves:
A) first price: 1.50 - next price 1.55
B) first price: 1.50 - next price 1.51
Are they equal up moves or is there any kind of difference?

Alex
  • #247
  • Jun 9, 2015 5:37am Jun 9, 2015 5:37am
Quoting alexx90
Why do some people understand the basics and some don't? For me there is a part of luck and a part of education, I need to fix my education. :nerd: {quote} If concluded that price is time indipendent, why should I use time then? Anyway, let's say that the way is time, how? what can I measure with time? One more thing. We all know that price moves up and down in a casual way. For casual I mean it doesn't follow a fixed scale for example, every price change of 1 pip from previous. No, it doesn't work this way. From 1.5004 next price can change to...
You should focus on things you can trade. Don't try to long figure out what others nice looking postings mean.
  • #248
  • Jun 9, 2015 7:50am Jun 9, 2015 7:50am
Quoting alexx90
Why do some people understand the basics and some don't? For me there is a part of luck and a part of education, I need to fix my education. :nerd: {quote} If concluded that price is time indipendent, why should I use time then? Anyway, let's say that the way is time, how? what can I measure with time? One more thing. We all know that price moves up and down in a casual way. For casual I mean it doesn't follow a fixed scale for example, every price change of 1 pip from previous. No, it doesn't work this way. From 1.5004 next price can change to...

If you want to gage the performance of price then you need a reference point, time is the reference point in my opinion.
  • #249
  • Jun 9, 2015 8:06am Jun 9, 2015 8:06am
Quoting mvp77
{quote} You should focus on things you can trade.
Ok, let's focus on things I can trade.
Some analogies.
I am the owner of a formula1 stable, in order to win the championship I need an advantage and it can be the driver (top driver between al drivers), it can be the car, tyres etc. I need some type of advantage (part of the system of formula1).
Forex, trading.
In order to profit I need some type of advantage, in this case this advantage is part of the system (forex market) and all I need to do is discover it.
If I don't know that advantage what can I trade and how do I make profit?
If i place a trade after the move, it's always a game over.
There should be something that let me to jump in at the right moment and take at least 1 pip or close the trade at least with breakeven or very little loss.
Example: throw a ball from hand. I'm a ant and I want to jump on the ball, the best moment is when the ball leave the hand, if i jump on when the ball is going to touch land it's game over. There is a space, time, delay, call it how you prefer, from when the ball leaves the hand and when it touches land.
Now don't ask me what is this advantage on forex because I still didn't discover it.

Alex
  • #250
  • Jun 9, 2015 8:54am Jun 9, 2015 8:54am
Quoting alexx90
{quote} Ok, let's focus on things I can trade. Some analogies. I am the owner of a formula1 stable, in order to win the championship I need an advantage and it can be the driver (top driver between al drivers), it can be the car, tyres etc. I need some type of advantage (part of the system of formula1). Forex, trading. In order to profit I need some type of advantage, in this case this advantage is part of the system (forex market) and all I need to do is discover it. If I don't know that advantage what can I trade and how do I make profit? If i...
You can't always choose the right moment to get in a trade, even CrucialPoint can't this.

My own system works with 1 indicator. It's a simple moving average ( ok, it's linear weighted ) . You see you don't need much to be profitable. The important things in forex for me are, how you handle a good entry and how you handle a bad entry.
  • #251
  • Jun 9, 2015 10:44am Jun 9, 2015 10:44am
Quoting alexx90
Why do some people understand the basics and some don't? For me there is a part of luck and a part of education, I need to fix my education. :nerd: {quote} If concluded that price is time indipendent, why should I use time then? Anyway, let's say that the way is time, how? what can I measure with time? One more thing. We all know that price moves up and down in a casual way. For casual I mean it doesn't follow a fixed scale for example, every price change of 1 pip from previous. No, it doesn't work this way. From 1.5004 next price can change to...
Just a curious question, but why do you think that price is time independent?

Forex is Time Vs Distance. No one looks at it like that but if you even go on 4H Time Frame and zoom out you can see a pattern of cycles in Time Vs Distance how much time and how far a distance and then Pivot! Once that realization is made proper strategies can be build on the foundation.

Just want to add that Alex is asking the right questions. Its about opening up perception and not limiting view nor over complicating it. Mvp has it right keep it simple he uses one indicator. I Use 2. I use Triangular slope of a moving average and a non lagging moving average both take measurements of market momentum combined with the logic of time vs distance. A market rallies for X amount of time a trend occurs of X amount of time everything can be measured.
There are those who know, and there are those who don't know.
  • #252
  • Jun 9, 2015 11:04am Jun 9, 2015 11:04am
If there's an edge in a single candlestick, it must be go long above the open and short below it.
Double the account
  • #253
  • Jun 9, 2015 11:48am Jun 9, 2015 11:48am
Quoting zghnno
If there's an edge in a single candlestick, it must be go long above the open and short below it.
While this proposal is logical, you have to account for whiplash as price can go above and below a reference point (open) several times during the day.
The trading idea is to get an edge via:

a) knowing the momentum or magnitude of a move such that price goes above/below Open permanently from the initial move, until the end of day.
b) aligning your trading time horizon so that you can catch (a) before it happens or after it happens through some confirmation.

I remember doing an exercise where I called the direction of the day based on price at 11pm GMT. I did this for a month with 70% accuracy. But it was for a trending market. That went crazy during consolidation. So, this is not as easy as it sounds to trade but it is simple enough to think about.

If movement / price action / volatility moves away from Open in one direction.... then any retrace is expected to maintain that trend unless the retrace becomes a change in trend and crosses the Open price again. How to do this over 3 trading sessions?
A pip is only worth it if you know how much you risked to earn it
  • #254
  • Jun 9, 2015 12:57pm Jun 9, 2015 12:57pm
Quoting change
{quote} CP you're a smart guy, no doubt. You're posts are always interesting but let me tell you this is a fairly trivial ex-post analysis (yourself said this). No offense intended here, english is not my mother language and didn't want to be rude but AFTER a long bullish candle is easy to state that in lower TF there has been bullish channel, Higher Highs and so on ... So far everything seems to solve in MTF analysys (scale to lower TF) and keep with the higher TF trend (obviously i miss something here). What a newbie like me has difficult time...

The thing you need to get your head around is your not trading that candle ...that candle is history when it is fully developed in time.your trading the development,if that development does not transpire you cut your risk
  • #255
  • Jun 9, 2015 1:49pm Jun 9, 2015 1:49pm
Quoting diceman555
{quote}...that candle is history when it is fully developed in time.your trading the development,if that development does not transpire you cut your risk
A long time ago i realized that i couldnt compare a pineapple with an apple, as they both looked odly different "they both contain the word 'apple'!" people said to me... then i realized that i had to compare a pineapple with pineapples, and only then i noticed differences between them. For one, they aint green

My bad, had a few too many today (beers that is, not pineapples).
  • #256
  • Jun 9, 2015 4:36pm Jun 9, 2015 4:36pm
Quoting diceman555
{quote} The thing you need to get your head around is your not trading that candle ...that candle is history when it is fully developed in time.your trading the development,if that development does not transpire you cut your risk

Right on target.
No more to say!
Solutions ONLY!!!
  • #257
  • Jun 10, 2015 2:19am Jun 10, 2015 2:19am
Quoting diceman555
{quote} The thing you need to get your head around is your not trading that candle ...that candle is history when it is fully developed in time.your trading the development,if that development does not transpire you cut your risk
that's for sure!

crystal clear to me from some time now

Still the question is the same: HOW? that's up to me, no doubt

Skfx gave very good insights (thank you mr, is dificult for a part-time trader like me always to follow that road but this is different history ...) .

Every other post i read here brings me to 1) short TF (to tick trading maybe) and 2) measure and catch volatility and momentum.

I'm sure i'm missing something more, so keep studying on it untill i get it

Thanks for the reply diceman, i've read many of your posts here at FF.

Forget my useless rumblings ...
  • #258
  • Jun 10, 2015 3:30am Jun 10, 2015 3:30am
Quoting change
{quote} that's for sure! crystal clear to me from some time now Still the question is the same: HOW? that's up to me, no doubt Skfx gave very good insights (thank you mr, is dificult for a part-time trader like me always to follow that road but this is different history ...) . Every other post i read here brings me to 1) short TF (to tick trading maybe) and 2) measure and catch volatility and momentum. I'm sure i'm missing something more, so keep studying on it untill i get it Thanks for the reply diceman, i've read many of your posts here...
Change,
Good to hear your thoughts. The idea of necessarily going down to short TF is not the case. You're essentially asking how to predict the future by being as close as possible to the present whilst at the same time being a part-timer. It's a recipe for trading disaster, imho.

The mere act of knowing that it is the development of price sets you free so that you're not married or tied to any indicator chart based graphic for your edge. It's more important that you develop your notion of what entry is most probable for reducing risk. Skfx examples are quite exceptional in pointing this out - but you don't necessarily have to be an intraday trader to take advantage..... a breakout strategy can work just as well as a MA cross etc.... if you know that NYC > LDN > HKG > SYD opens for example and you are long biased.....
A pip is only worth it if you know how much you risked to earn it
  • #259
  • Jun 10, 2015 4:26am Jun 10, 2015 4:26am
Quoting palabara
{quote} Just a curious question, but why do you think that price is time independent?
Open a daily chart, break down to 4h, break down to 1h, break down to 30m, break down to 15m, break down to 1m...is it possible to simplify more? Yes, break down to ticks.
Ticks don't follow time, at least this is what I see on a tick chart, they seems to appear on various fractions of time. They appear when there are transactions. They don't appear every 5seconds or 1second.
Time (as we measure it) is linear and ticks aren't.

EDIT: hei ya maybe my idea of time (linear) is not complete, maybe there is something to add or to remove.
  • #260
  • Jun 10, 2015 4:29am Jun 10, 2015 4:29am
Quoting alexx90
{quote} Open a daily chart, break down to 4h, break down to 1h, break down to 30m, break down to 15m, break down to 1m...is it possible to simplify more? Yes, break down to ticks. Ticks don't follow time, at least this is what I see on a tick chart, they seems to appear on various fractions of time. They appear when there are transactions. They don't appear every 5seconds or 1second. Time (as we measure it) is linear and ticks aren't.

True in Stocks and Futures.

False in Forex.
Double the account
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