THE JOY OF CANDLESTICK TRADING - a Learning Experience

[tonymand]

Originally Posted by tymen1

As part of the review process, I stress to all traders using candlesticks - do not use a trailing stop loss.
Such a stop loss creeps up on you very quickly and stifles your trade's "breathing room".
You are almost guaranteed to make a loss by using them.
Forex brokers love trailing stop losses - that is why the latest Dealbook has it specially included for very rapid entry.

Trailing stop losses will shut your trade off with a loss very quickly.

Setting a break even stop loss is a very different procedure and must be done manually.

Tymen, this is very timely advice that all should heed. The setting of stops and when to move them is indeed a skill of its own. Congratualtions on your elevation to the highest level of recognition. Well deserved. I continue to enjoy your very high quality contributions

[tymen1]

Originally Posted by tonymand

Tymen, this is very timely advice that all should heed. The setting of stops and when to move them is indeed a skill of its own. Congratualtions on your elevation to the highest level of recognition. Well deserved. I continue to enjoy your very high quality contributions

A whole skill of its own!
Wow.
I never thought of it that way, but you are right!

It takes quite a bit of learning to avoid mistakes with stop losses.

Thank you for the very kind compliments.
I shall do my best to please.

[Blaiserboy]

Tymen is doing his best to develop for us a comprehensive approach to trading.. very time consuming........ but there is going to be a great number of people benefiting from it long term

[tymen1]

Have you ever flown a radio controlled model aircraft?

Probably not.

Today, I visited a hobby shop just down the street and enquired about radio control planes for beginners. Besides being shown a suitable plane, I was also asked to fly a plane on a computer monitor.

So being full of enthusiasm, I opened the throttle on the controls and the plane went off the runway into the grass – crash!

Reset – another plane on the runway!!

After several tries, I managed to get control of the steering and the plane took off into the air. A quick nosedive and crash, one plane into many pieces.

Reset – instant repair!!

Another nosedive!
After about 10 nosedives, I was able to keep the plane in the air for longer – not that I was in any control of it. The plane was doing its own thing, and I, the pilot, was just hanging on!
So the smashes kept coming, this time from on high. The computer graphics were excellent – you saw your plane smash into many pieces.
A lot of money down the drain every time!!
That is, if it was for real.

What an amazing program!

I certainly needed a lot more practice to become a pilot who could actually control the plane, let alone be able to fly it to a destination!


The same is true for forex.

The new trader has all these controls, entry, stop loss, timeframes, pip movement etc, and no ability to use them.
So the new trader will crash every time, that is, loss of many pips. Forget about a stop loss – that is still too advanced for this trader.
Lucky it is demo trading, just like the computer flying simulator.

After a while, the trader gets to hang on and “fly” a trade. He has no real control and does not know where the trade is going.
He does not control the trade – the trade flies itself, and the trader, the “pilot”, hangs on.

It takes time to control a trade, to enter properly (take off), to monitor the trade right (fly the plane), to not take a loss (crash), to have control and determine the direction of the trade, (fly the plane to a destination), and finally to obtain a profit (safe landing).

Next post.

[tymen1]

In candlestick trading, there are traders at many levels of skill.

Some are beginners, they need simple guidance.
Others are advanced in their understanding, they can do complex trading.

In order to simplify the candlestick trading and make it presentable to everyone, I have capitalized on my simulator flying experience.

After some careful thinking, I have decided to develop 4 levels of the UM.

Each one of these levels is directed at a trader of a particular level of skill.

The first level is the Scalp trade.
Here, a new trader can get their feet wet and gain the confidence that candlestick trading so readily gives.
Efficiency is about 6-10%

The second level is the Basic trade.
Here a simple multiple amount format is used with no KC entries and no need for Starc bands. Many traders will feel confident with this level because of its simplicity and ease of use.
The great drawback is that it operates at only about 30% efficiency at best.


The third level is the Intermediate trade.
Here we build on the basic level by adding certain features.
I am not yet sure exactly what to add yet but they could be KC or retrace with Starc bands.
I will use my teaching skills to graduate this level carefully.
We increase our eficiency to above 40%.


The fourth level is the Advanced trade.
Here we use all the features depicted in the candlestick thread but in a simplified way.
Efficiency is 100%.


However, in all the levels, there will be some exciting modifications which will make entries, exits and using stop losses a very simple thing. This should be pleasing to all.

There will be basically 2 operations you will use in working your trades.
That’s right, no more than 2!!
They are :

1) Use of the Direct Deal (or market) order. This operation should be common to all broker platforms.
2) Use of your eyes!!
You will be using very special methods to do entries, lock in profits, set stop losses.
The method here is radical and a major breakthrough in simplification.



The development is well and truly underway and should be posted soon.

[VulcanClassic]

Tymen,

I really like that analogy. It just so happens that I work in aviation. Real world pilots use simulators as well for new type ratings. Initial training is a little different though, you get in an actual airplane with an instructor, kind of like what you're doing here Keep up the good work!

Are you going to get your pilots license?

[tymen1]

Originally Posted by VulcanClassic

Tymen,

Are you going to get your pilots license?

Sorry, no license for me.

I get so airsick in a small aeroplane that I nearly black out.

My friend, the pilot, was also a doctor, and he recognised the symptoms immediately and landed the plane.
This happened to me several times.
In the end, I had to call it quits.
I was very fortunate to have him as a pilot.

Full sized passenger aircraft are no problem for me though!!

[Ray_1]

Originally Posted by tymen1

In candlestick trading, there are traders at many levels of skill.

The first level is the Scalp trade.
Here, a new trader can get their feet wet and gain the confidence that candlestick trading so readily gives.
Efficiency is about 6-10%

The second level is the Basic trade.
Here a simple multiple amount format is used with no KC entries and no need for Starc bands. Many traders will feel confident with this level because of its simplicity and ease of use.
The great drawback is that it operates at only about 30% efficiency at best.


The third level is the Intermediate trade.
Here we build on the basic level by adding certain features.
I am not yet sure exactly what to add yet but they could be KC or retrace with Starc bands.
I will use my teaching skills to graduate this level carefully.
We increase our eficiency to above 40%.


The fourth level is the Advanced trade.
Here we use all the features depicted in the candlestick thread but in a simplified way.
Efficiency is 100%.

The development is well and truly underway and should be posted soon.

tymen1, you make me looking forwards to the new UM method. So we must master from the first level?

[muraleedharan]

Hi
This is good learning.I trade daily chart.Basically I am a swing trader who am in the market for two to three days.However in scalping and day trading , in fact I was doing it in the beginning , using candlestick charts the noice is too much.You tend to overtrade. In my case was overtrading. In my short and small experience I have felt the candlesticks below hourly time is not effective.Of course there may be a lot of people scalping,day trading using candlestiks succesfully.I also use my tape reading skills, if at all any ,to trigger in to the trade because price action is very important in short term and intermediate trading.
Good trading to all.
Muraleedharan

[Blaiserboy]

Originally Posted by muraleedharan

Hi
This is good learning.I trade daily chart.Basically I am a swing trader who am in the market for two to three days.However in scalping and day trading , in fact I was doing it in the beginning , using candlestick charts the noice is too much.You tend to overtrade. In my case was overtrading. In my short and small experience I have felt the candlesticks below hourly time is not effective.Of course there may be a lot of people scalping,day trading using candlestiks succesfully.I also use my tape reading skills, if at all any ,to trigger in to the trade because price action is very important in short term and intermediate trading.
Good trading to all.
Muraleedharan

Tymen is a scalper in real life. and has developed this technique for us to use in the lower time frames..... and is doing a fantastic job in that area.

This is a super thread..!