They weren't designed to be used as directional indicators nor were they designed to be used without market context. Yet, most folks using them incorrectly have found them to be problematic. Regardless, you can still make money with something that's 50:50.
Sure you can backtest candlesticks with context, what are you talking about? For example a "hammer" works well at the end of a trend. But what's the end of a trend? Well simply put a simple moving average on the chart and if the price stays above that moving average AND the hammer for, let's say, 2 consecutive bars then you could consider that as a confirmed buy signal. You can mathematically define and backtest all kinds of candlestick formations this way, WITH their "context", this is much easier than you think.
What cannot be back tested is how these candles / bars were made The battles⦠the dominance⦠the lethargy And that is the most important context RN
LOL It is vague - if youâre unskilled at reading PA (actual PA) Yeah I have â donated it to half price books (and I do mean donated) RN
The only thing that matters is reading and interpreting the charts, the rest is just bar conversation. Well too bad, used correctly the Japanese candlesticks do have a huge predictive power, especially if you mix them with western technical analysis.
"Morning Printing Fed" is very good! Or "Bullish Flying Fuckit" when you cant take it anymore and just must get in the trend with Everyone else already in.
Fully knowing there are more ways to make money from the mkt/ trading - than one can count â Iâll not respond to this As to predicting the mkt / price â itâs pyrite â suitable for newbieâs..., idiots..., the egotistical..., and gurus ======================== btw, "used correctly" no vagueness there I suppose - too funny... Yet I bet for a price you would teach how to use it "correctly" We'll see if you turn out to be a guru..., or not Oh and fair warning - if you are - you may want to seek another forum Just sayin RN
Sure, let's not forget tea leaves reading, tarot and astrology, just to name a few. Successful traders do NOT try to predict anything, they are just playing the odds, like a casino owner. Try to understand that simple concept first and then we will talk some more. Or not.
Do you really think it's that easy? An sma(20) may confirm but an sma(30) may not confirm --> subjective backtesting --> curve-fitting --> waste of time. Candlestick research shows they are useless timing indicators http://papers.ssrn.com/sol3/papers.cfm?abstract_id=980583 intraday: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2125889