[tymen1]

I am now going to proceed to candlestick trading proper. To introduce this we look at a trade comparison - going short ie going down.

Look at the below chart which displays a MACD and an evening star on the upper Bolinger band. (highlighted in blue).

Point A is where you would enter using the standard MACD.
Point B is where you would enter using the evening star candlestick formation.





By tymen1 at 2008-03-05





The difference is dramatic - a 30 pip difference. If you were scalping as I do then this indeed makes all the difference. With the MACD you are efectively missing out on one complete candle - and on some trades this might be the only candle that goes down - it could go up from here on.

In other words, the trade could well be all over by the time the MACD says to enter.
With candlestick trading you can be in and out of this trade even before the MACD devotee gets started.

Time delay in indicators is a fact.


Comments/rebukes/correctons invited.