Candlesticks, Gives money?

Discussion in 'Technical Analysis' started by capamunt, Apr 19, 2005.

  1. Hi,

    Formerly I was “elabuelo” but I decide to change to “capamunt” that means “go up”, more interesting in this business (Business?).

    I continue in my search of the Eldorado: “Make money playing”.

    But due to my intellectual limitation I need to make it step by step.

    Continuing with the Candlesticks I take my old SuperChart to make a comparison between three bullish reversal patterns from the original software.

    Based on this I made a several systems based on candlesticks pattern for go long and others for exit the long positions.

    To go long: Morning Star, Bullish Engulfing and Hammer.

    For exit I use the 3 patterns all together: Evening Star, Dark Cloud and Bearish Engulfing.

    And finally I make a system with the 3 pattern together to go long and the same exit assembly.

    The charts are this. The first are the Morning Star system on S&P500 index

  2. Hi,

    The 2º is the Bullish Engulfing as entry long pattern.

    The averages are 18 AND 200 EMA.

  3. Hi,

    The 3erd. is the Hammer pattern

  4. Hi,

    And finally, the all together go log pattern.

  5. Neodude


    It doesn't look like you are using candles in your chart pics...
  6. Hi,

    I don't use the candles in order to show more bars, but the signals are based on candles.

  7. Hi,

    Like this

  8. candles are unnecessary. just zoom into a lower time frame to see the price pattern that comprises the candle. you'll gain a much better understanding of the price movement, and thus improve your accuracy and eradicate a lot of false signals.
  9. Hi 50cent,

    If someone is using candlestick analysis and then zoom in on a lower time frame...

    That trader will still see candlestick lines or patterns.

    However, I do know what you meant eventhough others may not.

    Simply, learn and understand the reason behind the price action prior to applying candlestick analysis or anything else (indicators or whatever).

    This I strongly agree with.

    Yet, you don't need to zoom in or use lower chart intervals to learn and understand price action.

    In fact, you can zoom out and do the same...the big picture sort'uv speak.

    Maybe this is what capamunt was trying to do via the higher chart intervals...

    Zoom out regardless if he's using line charts, candlestick charts or doing candlestick analysis.

    Back to trying to understand the price action...

    Why does the price action do what it is doing ???

    That's something that can't be canned into TradeStation (capamut software) or any other software...

    It requires us to do some real work:

    * Understanding and reacting (not anticipating) to key economic report releases.

    * Being aware of key regular schedule market events (such as expiration week).

    * Being able to adapt (trade management) after the entry signal especially since the market is always changing.

    * Understanding the relationship between smaller chart intervals and larger chart intervals.

    * Anything else I failed to mention.

    Regardless, the issue is that Japanese Candlesticks works...not all pattern nor all their sub-patterns.

    Those that couldn't get it to work only implies their methodology of using candlesticks wasn't as good as someone that was able to put the puzzle together sort'uv speak.

    Last of all, of all the patterns capamut has begun studying...

    Only one of them is suitable for a trader that's new to Japanese Candlesticks...

    The Hammer pattern (including the inverted hammers).

    This pattern alone...if mastered...will bring an understanding to all other candlestick patterns in my opinion.

    That should be the starting point for any trader that's new to Japanese Candlesticks.

    An academic analogy...the Hammer pattern is like Candlestick 101.

    If you can't pass Candlestick 101 you will do horrible in Candlestick 201 or 301 or any other advance candlestick understanding.

    Other interesting discussions on Japanese Candlesticks...

  10. NihabaAshi,

    of course, one needs to zoom in and out so to get a complete picture of the market movement, since the movement is fractal.

    but all i was saying was, that instead of learning by heart candle stick names like "harami" or "three black crows", one can simply 'look inside' the candlestick, and see the price action that comprises it.

    it simply resolves the mystery and opens the black box.
    #10     Apr 29, 2005