Hello. I am new and I am starting to trade the forex market. I am already using a simple modified bollinger band system and am doing OK. I would like to add some candlestick analysis to my system. I was wondering, what timeframe produces the most reliable candlestick patterns? (I currently use 15 and 30 min charts) Thanks in advance!
The ones your currently using are ok (15min and 30min charts). There's really no best chart interval for candlestick patterns. However, how active of a trader you want to be will be the most important factor in determining what interval you want to use. For example, if your looking for 3-5 pattern signals per day... Using the 60min chart interval and higher probably will keep you inactive in comparison to that goal of getting 3-5 pattern signals per day. Here are my favorite chart intervals: 2min, 3min, 5min, 10min, 15min, 30min, 60min, 120min, daily, weekly and monthly. Now...what type of trade it is going to be (day trade, position trade, swing trade or long term hold)...will determine the chart intervals I will pay close attention to in looking for pattern signals. Mark
Mark, I hate to beat a horse (not really) but since you didn't answer my question in a previous thread regarding this very question I will post it again. I would hate for traders, especially new ones, to get the completely wrong idea of the accuracy of Candlesticks combined with Minute charts. "Please correct me if I am wrong but Candlesticks are interpreted based on the price bar they are overlayed on correct? If the price bar is created using minute charts the interpretation is flawed because the servers that spew out the data, very the data and the time it sends it out. Besides, Markets aren't traded in Time that are traded in shares or contracts. (This is verifiable from the data providers, not something I pulled out of thin air). If the Candlesticks are created on a Tick Chart that interpretation is flawed because GLOBEX recently eliminated the constant Tick Charts in favor of a manually created feed environment to smooth their servers out (again verifiable through the data providers). This being the case the ONLY Chart that will accurately interpret Candlesticks, consistently would be Volume or Contract Bars because they are strictly and flawlessly based on the exact number of contracts or shares traded per bar . . . correct?"
Hi Charlie, I do remember different traders over the past few years at ET asking that same question or similar like in which I and others have responded to. It's possible I answered your specific question long after you stopped viewing whatever thread that was or you posted your question long after I stopped viewing that thread for whatever reasons. (Note: Usually I stop participating in a thread when particular traders show up that have a bad reputation for off-topic discussions, name calling, personal attacks or antagonistic challenges to other traders.) Also, I do remember recently someone (not you) that asked me similar question and I asked for him to post a chart of what he called as ONLY volume or contract charts... He never responded nor posted a chart in reference. In fact, the few prior times that question was asked and I responded...I never got a reply back after asking for an example. With that said...since you've asked that question in this thread... You don't have to be trading candlesticks to know that not every data provider on this planet is spitting out the same information. All data providers will have accuracy issues at one time or another. The good ones will obviously be more accurate in comparison to others. Usually its cost related...the more money you spend the more reliable the data especially during fast moving markets. Just the same...we ourselves could be having computer problems (cache issues) or ISP problems in which the data isn't accurate. Therefore, even which the type of charts your suggesting can be flawed if your having computer problems or ISP problems (cache issues or lost data packets). Further, I've never used Volume Only or Contract Bar Only charts for candlestick analysis. Thus, until I see one and do a comparison which my data providers charts... I cannot sit here and tell you which will be more accurate for candlestick analysis. Once again...many times here at ET I've asked for chart examples of different traders asking the same question... Not one person has posted a chart example and I'm not sure why. The last person to asked that question to me about non-timed based charts in relationship to the number of pattern signals was jdollar and I asked him to show an example... Till this day he has not. http://www.elitetrader.com/vb/showthread.php?s=&threadid=52880&perpage=5&pagenumber=86 Also, I don't know if you know but if you understand WRB Analysis...you don't need volume analysis. I've posted dozens and dozens of chart examples here explaning WRB Analysis among other explanations eventhough though topic may not have been specific to WRBs (wide range bodies). Simply, to answer your question more specifically... The internet is not perfect and it doesn't matter what type of trader you are, what type of charts your using... There are many different variables that will cause you to view something that's not accurate. * Errors by the exchange itself * Errors via your data provider * Errors caused by computer problems * Errors caused by ISP problems * Errors caused by third party applications Post a chart example of the price action in any of the Emini Futures, Eurex Futures, Euronext Futures, Treasury Futures and I'll take a close look at what your talking about to make sure we are on the same page sort'uv speak. Out of curiousity, what data provider has non timed based charts or charts based on volume or contracts only? I've sat side by side with traders using either QCharts, esignal, CQG, FutureSource, ProRealtime, Broker charts, third party software vendors et cetera... I'm never surprised when I see all of us with different volume info or different contract size at a specific time as a print. I also hang out in several chat rooms and its the same scenario. Someone saids did you see that single 200 contract print at 10:14:34am and the other traders say via examples... * I got four 50 contract prints at that time. * I got only a 10 contract print at that time but got 180 print at 10:14:42am * I haven't seen a 200 contract print all day. All the above using different data providers or different ISP or using different computers et cetera... Many variables for the difference. Thus, its not flawless and that's the nature of the internet. Mark
Tradestation has volume bars, tick count bars, % change bars and I can make Kase bars if I have to but it requires export to Excel and re import
What's your opinion about what Charlie Dow said via your access to time based charts and non timed based charts??? Also, can you post one chart example of a non timed based charts or a chart based upon volume/contracts only. Thanks. Mark
Wow, you talk more than I do . . . lol I can't speak for anyone else but I don't want to post a Constant Volume Bar Chart because of the proprietary increments I use. You have access to Esignal or Tradestation you can research them on your own. Esignal is ok but Tradestation doesn't build the bar consistently so they are worthless in their environment. What I was pointing out, from a common sense point of view, is that the only way Candlesticks can even be remotely accurate and consistent is if they are applied to a consistent non varying Chart. The only chart out there that is meets that criteria would be Constant Volume or Contract Bar Charts. Regardless of the data provider, the number of contracts or shares traded per day are the same. The difference comes in when the data provider manipulates the way the transactions are registered.
Hi Charlie, Until I have access (able to see) to what your seeing on your charts... I can't disagree nor agree. Can you blacken out the proprietary increments and just show the candlesticks and the name of the trading instrument so that I can compare it to my time based charts??? Without that...probably best to have a conversation with someone else about which is more accurate...someone that has access to time based charts and to your proprietary charts. Yet, it probably sounds like your conclusion is not based upon your opinion only and that someone else sees what you see...correct? Back to those charts...currently someone in one of the chat rooms is about to post some chart examples for me in the chat room. Mark