There is more information in the candlestick chart than you will ever know.

Discussion in 'Strategy Development' started by ansesfj, Nov 19, 2018.

  1. ansesfj

    ansesfj

    We learn to read the candlestick chart by grouping candlesticks together to reach some sort of formation. Each formation sends a signal of whether it is a good place to BUY or SELL. There are so many formations to learn and to know all would be a real gift to your trading, but is it really worth studying these different formations?. Do they really help traders make the right decisions?

    When I was working on a strategy where I wanted to buy at the bottom of an uptrend and sell at the top of a down trend, it sounded a bit impossible for most traders when I tried to talk about this idea. There were a lot of mixed emotions and I was met with many unpleasant traders who thought i was just plain stupid.

    During the course of research and testing, I found that reading candlesticks in formations is a very daunting task. I then tried to read them individually , taking each candle's story as the day unfolds to see if I can see a trend developing. Well, I was surprised to find a few things that , I will not mention here, but has helped me with my new winning strategy.

    Below are some of my trades where I was able to place my buys at the bottom of an uptrend and my sells at the top of a downtrend.

    Just by learning to read the candlesticks individually, can tell you of what to expect.

    Take for instance this chart below where i managed to place my SELL right at the top of the trend, before I could place this trade, I noticed that the previous candlesticks were really short and the price was just moving sideways for quite a while. That is a sign for a big move, when the price went beyond the open, I placed my SELL and minutes later came that big fall.
    15Nov2018gbpjpy.jpg

    These are other examples of this strategy at work:
    9nov2018 gbpjpy.jpg


    My advice for those who would like to create winning strategies is to learn to read the candlesticks individually. Spend a whole day or a whole week just staring at them and see how each candle contribute to the overall market performance for the day.
    10NOV2018.jpg
     
  2. wrbtrader

    wrbtrader

    How long did it take you to make this into an automated trading system or program or what were the results of your backtesting ?

    wrbtrader
     
  3. Aj2014

    Aj2014

    do some real time calls
     
    ansesfj and murray t turtle like this.
  4. Sprout

    Sprout

    You’re on a good path. As you continue to analyze bars and formation of bars by including and expanding the number of bars as formations adding the parameter of volume will be even more informative and distinguish the difference in similar price formations in various contexts of trend development.

    As for naysayers they serve as distractions and offer limited value and best put on ignore unless you enjoy doubt over what your due diligence is informing you.
     
    ansesfj likes this.
  5. volpri

    volpri

    Yes...sounds good..really good.
     
    ansesfj likes this.
  6. Candlesticks have some merit. Afterall, they've been used for literally centuries, originating with Japanese rice traders. But therein lies the problem with them as well.

    Candlesticks have been researched and analyzed out the ying-yang. If candlestick formations are the only tool in your toolbox, you will have a very difficult time over the long haul, although that statement is somewhat dependent on the type of trading (intraday, swing, position, buy and hold, etc) you do. Of course you can point to successful trades... So did the rice traders, and (obviously) some modern day traders as well.

    My point is candlesticks are merely a tool. Nothing more. Check out Bulkowskis thepatternsite.com for individual candle (and multi-candle) probabilities. It might disrupt several of your biases. And of course, Steve Nison, the man, the marketeer, who brought candlesticks to the western world. Many candlestick gurus can be easily found. Unfortunately, regarding candlesticks, "guru" means marketer, which is not trading. Nothing new to see here, sorry, no grail, just a tool. But I wish good trading to you on your journey.
     
  7. ansesfj

    ansesfj

    This is not an automated system, it is a manual system where i analyze the charts myself and place the trades.

    This was an on going thing which started back in 2009 when i began to notice things on the charts that were not taught or written any where in the forex field. Many of us are just using the techniques that were written in Forex books or available on the internet.

    I used to use those before, but i rarely make much profit from those techniques, but with the method that i am using now , i rarely make any losses.
     
    Last edited: Nov 19, 2018
  8. ansesfj

    ansesfj

    These are real time calls .....on a live account. Im still testing them and they are looking really great at this time.

    On second thought, do you mean you want me to give you guys a BUY/SELL signal on this page ? I can do that.
     
    Last edited: Nov 19, 2018
  9. ansesfj

    ansesfj

    That is very true about the naysayers though. I was met with many unpleasant comments when i first started pursuing this, but now many of those that doubted me are now asking me to help them out.

    This is my trade last night using the same method on a GBP/AUD trade. When i got to my desk to check the charts, the GBP/AUD has already made that big move...after analysing the charts and the candlesticks , I realize it was still going to go up....so I placed a BUY and as you can see, it had made a good amount of profit in pips.
    GBPAUD 19 nov2018.jpg
     
  10. wrbtrader

    wrbtrader

    Seems like your observations are based upon visual inspection. Yet, actual backtest numbers supporting those observations is what you want...follow by simulator trading results...that's what you want to do prior to real money trading.

    It'll minimize too many common problems that plague us traders.

    Regardless, everything eventually stops working and then needs adapting for current market conditions.

    wrbtrader
     
    #10     Nov 19, 2018