E-Mini's - Candlesticks & Min. Charts, NOT!

Discussion in 'Technical Analysis' started by ProfLogic, May 11, 2004.

  1. Here is something to think about. When analysing any Index or stock to trade, do you want to analyse "Perfect Data & Information" or imperfect data and information. Stupid question I know but that is exactly what putting Candlesticks on Minute Charts does. First think about any minute chart and it's relationship to accuracy. The Indices are traded in contract or transaction increments NOT minutes. So any Minute chart is giving you variable and imperfection information in relation to the price action of that particular Index. Now lets look at Candlesticks. Candlesticks are indicators that either individually or in groups "Tell" the trader what is likely to happen in the future direction of that Index's overall price action. Candlesticks are what is called an "interpretation indicator" because they interpret price (open/close/high/low). So logically, and in conclusion, anytime you apply Candlesticks to any minute chart what are you doing? You are using an "interpretive indicator", the Candlestick, to interpret varible and inaccurate price data, Any Minute Chart. Tick charts are more accurate that Minute charts because they are based on a specific number of transactions per bar but a transaction can be one contract or 300 contracts. Perfection is a "Contract" or "Volume" Bar where each bar is made up of a specific and perfect number of contracts traded. This way when you apply Candlesticks to a Contract or Volume Bar you have perfect consistency of Price action.
    For those of you using Candlesticks and Minute charts, this is the main reason your consistency in trading is lacking, to say the least. Is my logic wrong?
  2. dbphoenix


    Your logic is correct if you believe that candlesticks are indicators. But I haven't seen any evidence that this is true.
  3. Ditch


    You can't disregard the role of time in the marketplace, the market can only spend so much time in a given range, that's where the value of timebars lies.
  4. Yes I can and do totally disregard time in the Marketplace except for Market Hours. I prefer to trade using "Perfect" information. Time, in relation to price action, is one of the greatest variables the Market subjects traders to and I for one am not go to interject guessing into my trading at any time. Price is Perfect when read in Perfect and Consistent increments. That is Logic that is infallible.
  5. Ditch


    Let's hope the same goes for your trading
  6. dbphoenix


    Actually, he's correct about the time bars, though I don't know what's with the speaking in capitalized words. Bar intervals are an arbitrary structure placed upon the market by the trader and as such are irrelevant to such considerations as support and resistance. Whether they're candlesticks or not is beside the point. If one is in tune with the buying and selling waves, even charts are immaterial.
  7. They


    Time validates price as does volume!

    Whether you break price action in to time segments or volume segments you are breaking it up. Systematic traders do this to acquire a data series. A data series can be used to test trading theories for a statistical advantage. A statistical advantage is all a trader can hope for. (well, besides luck)

    Your point that the market does not move in 1, 3, or 5 minute increments is true. It is also true that it does not move in 100, 300 or 500 contract increments.

    Btw, If you use any static oscillator, even on volume bars/candles, your time segmented candle discounting will be simply seen as hypocrisy.

    Volume Profile is the study of volume at price. Market Profile is the study of time at price.

    Both are used to define support and resistance. Have you ever wondered why TT (the most widely used futures order entry platform) has a built in Volume Profile chart?

    Volume at price/Volume Profiling shows you what happened in a 5 second, 5 minute, 500 contract or 5000 contract bar/candle

    Support and resistance are relative to the time frame you are trading. If you are a scalper you can use programs like http://www.marketdelta.com (no time or volume segmentation) and if you are a swing trader you can look at a dynamic profile of the last 20 days for s/r levels

    Below is an image of today's ES chart using 10,000 contract bars (no time segmentation) with a Volume Profile histogram showing support and resistance.

  8. Steve789


    "If one is in tune with the buying and selling waves, even charts are immaterial."

    Just how does "one" do that exactly? Volume perhaps? If you answer yes I would like to ask you to interpret a chart. Thanks.

  9. I understand your response but you are missing my point.
    No the Market does not move in volume increments the same way it doesn't move in time increments but if you are going to "read" a book written in English why on earth would you opt to first translate it to Chinese to read it. Read the Market price action in the purest most perfect form it is offered to you . . . in volume bars. Don't make it more complicated than it needs to be.
  10. Steve, don't worry, even with volume bars you need a chart to see the price action and levels . . . unless you are "a Supreme Being" and then you don't need to trade . . . just walk through the bank valt walls.
    #10     May 11, 2004