white/black candle ratio

Discussion in 'Trading' started by futurecurrents, Aug 13, 2003.

  1. I like to look at my performance over a market period that is neutral, no gain or loss for the relevant index.
    So I was looking at the last five weeks of the naz,back to July 7, which is such a period and I notice that of the last 28 trading days only 30% of them were white, 45% black and 25% were dogi days. No surprise that some of our methods have yielded little during this time.
    Since I and probably most of us trade intraday, the color of these candles and their range has more importance on our profitability then the longer term measured rise or fall of the index.
    So even though the naz has gone nowhere, the intraday action has been decidedly negative.
    What might this say about the market? Have the big players been pumping up the opens and then selling out? Is this a classic case of distribution?
    I've never heard of white/black candle ratio discussed before as a possible indicator. I'm sure I'm not the first to think of this. Maybe there is some other term for it.( I don't know everything yet).

    Comments? Other than about how ignorant I am?
  2. Based on the Eminis...ES and NQ daily

    the market has been in an uptrend since March 31st.

    However...it has been in a sideways or consolidation pattern with a negative bias to it since about June 17th.

    Since June 17th...ES has 42 daily candlesticks...21 of them were dark/filled candlesticks...21 were white/empty candlesticks...no dojis...

    info via QCharts ES all session daily charts.

    It's tough to find any useful info out of Black/White Candlestick ratios based on the market when its in a consolidation pattern since June 17th...

    other than reduce your risk exposure and wait for another trend via a key breakout or breakdown of some resistance/support area out of this consolidation.

    Right now for me...anything between the ES 959.00 - 1016.00 area is a good time to reduce risk or position size exposure.

    Simply...if any use can be found out of white/black candle ratios...

    most likely should have more to do with position size management instead of any specific trade signal.

    Good night all.

  3. "Simply...if any use can be found out of white/black candle ratios...most likely should have more to do with position size management instead of any specific trade signal. "

    Nihaba. Respect your opinion highly especially regards candlesticks.
    That being said, I'm not so sure that nothing can be inferred from this ratio.
    After 28 days on the comp with no net change, but 50% more black days than white..... would seem to me to be quite bearish. At least for this index. Very basically it means that after the opens there was more selling than buying interest.

    Then again, this type of thing should be easy to backtest, so if there's anything predictive about it we'd have heard about it.