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Higher Edge within a Single Candlestick

  • #301
  • Jun 14, 2015 12:05pm Jun 14, 2015 12:05pm
Yes,this thread reflect how traders are looking for an edge for trading Forex or other markets.But I saw that most ideas stem from confusion about where to enter the market best to capture as much as possible of price swings.

Although most writers are trying to do so,but they are confusing things together.After all nothing is changed price is either moving up or down,price is the same at all time frames.I am describing the whole thread as someone is saying how to trade small price swings with success ?

I am sorry,my ideas are simple and that is how I look at price,so excuse my ignorance.

atheer1
atheer1
  • #302
  • Jun 14, 2015 12:35pm Jun 14, 2015 12:35pm
Quoting atheer1
Yes,this thread reflect how traders are looking for an edge for trading Forex or other markets.But I saw that most ideas stem from confusion about where to enter the market best to capture as much as possible of price swings. Although most writers are trying to do so,but they are confusing things together.After all nothing is changed price is either moving up or down,price is the same at all time frames.I am describing the whole thread as someone is saying how to trade small price swings with success ? I am sorry,my ideas are simple and that is...
Exactly!
For me, this thread looks increasingly like Merlin's "amazing strategy".
  • #303
  • Jun 14, 2015 2:17pm Jun 14, 2015 2:17pm
Quoting Sis.yphus
Been seeing a lot of people talking about using the previous candles close direction as a way to give an indicator of what the next candle will do. Hate to burst any ones bubble but the previous CLOSED candles provide no edge at all. If candles matter, the ONLY one that will and does is the current(this applies to CANDLES not PRICE, they are very different. candles are made up by price. Price is not made up by candles). Please see the study I did a few weeks ago(copy and pasting from an email I sent a buddy the other day so I apologize if it is...
THIS MARKET IT SO EFFICIENT
yes it can be,

there is one thing this market can guarantee and that is to be efficient.i would suggest one should look to trade that guarantee....
  • #304
  • Jun 14, 2015 7:10pm Jun 14, 2015 7:10pm
Quoting Sis.yphus
There you have it folks. If analyze CANDLES the only CANDLE that can give you any edge at all is the current one because if it is higher than where it started, bull sequences will be favored and the same goes with bearish sequences if the sample is lower than where it started.
Great work Sis. I was thinking of doing some analysis on candle sequencing myself, so you've saved me a lot of work. Thanks for posting it. And yes, the one consistent thing about the market is that it's efficient. I wonder how we can take advantage of that?
You reap what you sow.
  • #305
  • Jun 14, 2015 7:57pm Jun 14, 2015 7:57pm
Quoting Sis.yphus
Been seeing a lot of people talking about using the previous candles close direction as a way to give an indicator of what the next candle will do. Hate to burst any ones bubble but the previous CLOSED candles provide no edge at all. If candles matter, the ONLY one that will and does is the current(this applies to CANDLES not PRICE, they are very different. candles are made up by price. Price is not made up by candles). Please see the study I did a few weeks ago(copy and pasting from an email I sent a buddy the other day so I apologize if it is...
Hi Sis.yphus,

Yes I did some studies on sequences a while back and had similar results. From memory, my findings were that:

1) Higher frequency sequences had too small an edge to be worth trading. This is true even if you use a long time frame chart or look at longer term range/renko bars.

2) Lower frequency sequences have a larger edge but not much chance overall to make on these patterns (too infrequent). As a kicker, low frequency sequences tended not to generalize profitably on new data. This tendency to not generalize profitably on new data was also seen to some extent on higher frequency sequences.

Due to these findings, I didn't pursue sequences any further. I also ran into at least one academic paper (after doing the tests) that basically said the same thing (temporal sequences are unreliable).
  • #306
  • Jun 15, 2015 10:40am Jun 15, 2015 10:40am
Quoting FXEZ
{quote} Hi Sis.yphus, Yes I did some studies on sequences a while back and had similar results. From memory, my findings were that: 1) Higher frequency sequences had too small an edge to be worth trading. This is true even if you use a long time frame chart or look at longer term range/renko bars. 2) Lower frequency sequences have a larger edge but not much chance overall to make on these patterns (too infrequent). As a kicker, low frequency sequences tended not to generalize profitably on new data. This tendency to not generalize profitably on...

Good to see you FXEZ

Glad to see that some other people have found the same outcome as me. It always nice to have your work align with others in the field as a good gage of the accuracy of the work. I was ashamed that it provided no real edge at all but it was nice to have another "system" debunked.

I also noticed that lower time frames do produce exponentially more opportunities than the higher ones, which make sense since its just a fractured up version of the large picture.

Quoting NorthTrader
{quote} Great work Sis. I was thinking of doing some analysis on candle sequencing myself, so you've saved me a lot of work. Thanks for posting it. And yes, the one consistent thing about the market is that it's efficient. I wonder how we can take advantage of that?
Glad you found the work useful NorthTrader and I am glad I saved you sometime pursuing a dead lead. I too have been stumped on how to really take advantage of the efficiency of the market and I have only come up with one solution.

Open a brokerage and collect spreads all day while every one else chases the mirage of profitability
  • #307
  • Jun 16, 2015 4:32am Jun 16, 2015 4:32am
Quoting Sis.yphus
I too have been stumped on how to really take advantage of the efficiency of the market...
Whenever i look at a price chart its as if im looking at a shadow of what is unfolding without truly seeing what is behind that shadow.

The only valid time in the market is start/end of a session or overlap, other than that i dont see the point in time'frames' since the market doesnt move because of a candlestick being green or red for the last minute, the market could care less what direction the candle is in (hence the 50/50 ish efficiency).

Could you imagine a local in chicago thinking 'lets see what the daily chart has to offer'?
They will be looking around getting a feel for how much/how hard is hitting the bid, is it holding/refreshing/pulling? Same for the offers.

It is persistant buying/selling pressure (be it mkt pressure or limit pressure) that dictates the inmediate potential of THAT candle.

So in my naive experience, a candle shows the movement of price, it does not show the intent nor conviction behind that particular price. So analyzing price without understanding or seeing the conviction (or lack of) behind such price or range of price is like drinking from a bottle without looking at the label. For all you know its weed killer and you think its water. I mean, its still a bottle right?

One of the shortlists as to gauging conviction (or lack of) price following through is actually looking at forex as a whole, for a currency is the sum of all its subpart crosses. Why look at one piece of a 200pc puzzle to discern where to put it? wouldnt it make more sense to look at all the pieces? For the sum of all pieces IS the puzzle.

/

EDIT: Another way of looking at effiency is the Internet.

Before the Internet, a few 'elders' of mine made a shit load of money buying and selling cars importing them. They had enormous edge because of lack of information....how do you know this BMW is cheap/expensive? You compare to your surroundings right?
Well what if you could buy it overseas for 1/3 cheaper, import it, and sell it at local value? Lots of money to be made.
Enter the Internet...try do it now. Markups are veeerryyy slim because more people have access to such knowledge.
The more people know, the less you can make and the more competition exists.
  • #308
  • Jun 16, 2015 12:49pm Jun 16, 2015 12:49pm
Quoting Pipalicious
{quote} Whenever i look at a price chart its as if im looking at a shadow of what is unfolding without truly seeing what is behind that shadow. The only valid time in the market is start/end of a session or overlap, other than that i dont see the point in time'frames' since the market doesnt move because of a candlestick being green or red for the last minute, the market could care less what direction the candle is in (hence the 50/50 ish efficiency). Could you imagine a local in chicago thinking 'lets see what the daily chart has to offer'? They...
One of the shortlists as to gauging conviction (or lack of) price following through is actually looking at forex as a whole, for a currency is the sum of all its subpart crosses. Why look at one piece of a 200pc puzzle to discern where to put it? wouldnt it make more sense to look at all the pieces? For the sum of all pieces IS the puzzle.


i am not sure how many will understand what a gift this statement is.
  • #309
  • Jun 16, 2015 1:13pm Jun 16, 2015 1:13pm
Quoting diceman555
{quote} {quote} One of the shortlists as to gauging conviction (or lack of) price following through is actually looking at forex as a whole, for a currency is the sum of all its subpart crosses. Why look at one piece of a 200pc puzzle to discern where to put it? wouldnt it make more sense to look at all the pieces? For the sum of all pieces IS the puzzle. i am not sure how many will understand what a gift this statement is.
Are you color blind?
  • #310
  • Jun 16, 2015 1:39pm Jun 16, 2015 1:39pm
Quoting mvp77
{quote} Are you color blind?

does the red look a little bright ?

actually this could solve a riddle ,i think ive been buying when i should have been selling.....

i ve just given the secret away
  • #311
  • Jun 16, 2015 2:19pm Jun 16, 2015 2:19pm
Quoting diceman555
{quote} does the red look a little bright ? actually this could solve a riddle ,i think ive been buying when i should have been selling..... i ve just given the secret away
Now, i can read your post ! Without ........
  • #312
  • Jun 16, 2015 3:30pm Jun 16, 2015 3:30pm
Quoting diceman555
{quote} {quote} One of the shortlists as to gauging conviction (or lack of) price following through is actually looking at forex as a whole, for a currency is the sum of all its subpart crosses. Why look at one piece of a 200pc puzzle to discern where to put it? wouldnt it make more sense to look at all the pieces? For the sum of all pieces IS the puzzle. i am not sure how many will understand what a gift this statement is.
  • #313
  • Jun 16, 2015 3:48pm Jun 16, 2015 3:48pm
Quoting LITEchild
{quote}

what is a sub part cross? you mean timeframes?
  • #314
  • Jun 18, 2015 11:43am Jun 18, 2015 11:43am
Quoting jimsterk
Hi, Firstly, Neio, thank you sooooo much to open this thread! Since I have found this thread, I focused on the single candlestick and researched many threads in FF. It was surprizing, not just surprizing but rather I was shocked, that almost all threads discuss about pattern, formation, S&R, demand&supply, etc. People use candlestick for their analysis, but they never analyze candlestick itself. Yes, I was shocked. I also thank CrucialPoint for openning my eyes. http://www.forexfactory.com/showthre...34#post4690034 Since I...
I think that the edge of a candlestick is the same as "95% of the time price will close above or below the open", movement.
How is it going jim, are you still testing?

Alex
  • #315
  • Jun 19, 2015 11:03pm Jun 19, 2015 11:03pm
Quoting tradeforlife
{quote} You mean you take the reference point as open of the current (progressing) candle or previous candle jimsterk?
Sorry for late reply. I rarely come to the forum.
It's current (progressing) candle.

Quoting alexx90
{quote} I think that the edge of a candlestick is the same as "95% of the time price will close above or below the open", movement. How is it going jim, are you still testing? Alex
Currently, I look for other platforms and other brokers instead of mt4.
  • #316
  • Jun 20, 2015 2:21am Jun 20, 2015 2:21am
I am currently conducting some analysis on ohlc data as neio suggests... When I download history to csv format from mt4 the data is piled into 1 column in excel whicheans having to extract each data point into separate columns which is very time consuming... Does anyone know of a way to have the csv file exported from mt4 so that all the dTa points are arranged neatly into individual columns in excel? Would be of great help!
  • #317
  • Jun 20, 2015 6:42am Jun 20, 2015 6:42am
Quoting NaughtyPip
I am currently conducting some analysis on ohlc data as neio suggests... When I download history to csv format from mt4 the data is piled into 1 column in excel whicheans having to extract each data point into separate columns which is very time consuming... Does anyone know of a way to have the csv file exported from mt4 so that all the dTa points are arranged neatly into individual columns in excel? Would be of great help!
not to worry figured it out
  • #318
  • Jun 23, 2015 4:23am Jun 23, 2015 4:23am
Yes, glad u figured it out OP, there is definitely an edge within a single candlestick
  • #319
  • Jul 3, 2015 9:55am Jul 3, 2015 9:55am
average wick size < average body size = € ?
  • #320
  • Jul 7, 2015 6:28pm Jul 7, 2015 6:28pm
Quoting diceman555
{quote} {quote} One of the shortlists as to gauging conviction (or lack of) price following through is actually looking at forex as a whole, for a currency is the sum of all its subpart crosses. Why look at one piece of a 200pc puzzle to discern where to put it? wouldnt it make more sense to look at all the pieces? For the sum of all pieces IS the puzzle. i am not sure how many will understand what a gift this statement is.
Call me slow, have but I am still trying to understand how I can visually see this. I summed similar pairs and made a line graph indicator, yet I don't see an edge. Any feedback would be greatly appreciated!
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