THE JOY OF CANDLESTICK TRADING - a Learning Experience

[tymen1]

The final 5 minute chart of the EUR/USD trade. >>>


By tymen1 at 2008-03-27

The entry short at 34 is shown on the chart with the orange curved line.

The price rose to 35 (red candle next to it - can you see it? ) but after that it soon dropped and then made its way down to the area marked "exit area"

In this area the MACD starts to slow down from its fall. This is one way of closing your trade. Another is to use a trailing stop. I usually pick 10 pips - I am not game to go much further.

END OF TRADE SEQUENCE

[tymen1]

I have long coveted the higher rank I have now been promoted to.

Now I have reached it, I am going to celebrate!

Next posts Monday.


By tymen1 at 2008-03-28

[Sweet Pip]

Congratulations Tymen !!

[jlmac27]

Hello Tymen, CONGRATS!!
I have been looking back on some of my charts and sometimes I see the middle BB going down and the macd going up.Where does that put the resultant,(price)?In your examples the resultant is always inbetween the vectors...correct?So what happens when the top vector is pointing down and the bottom vector is pointing up?

[Sweet Pip]

Originally Posted by jlmac27

Hello Tymen, CONGRATS!!
I have been looking back on some of my charts and sometimes I see the middle BB going down and the macd going up.Where does that put the resultant,(price)?In your examples the resultant is always inbetween the vectors...correct?So what happens when the top vector is pointing down and the bottom vector is pointing up?

Good question!...(wondered that too but was being patient )

[jlmac27]

Hello,
Does anyone following this thread have Oanda as a broker?They have NO KK bands.I have MT4 as a demo. I do all my charting with it.... buuut.I don't think it would be a good idea to use these two platforms next to each other for a scalping system like this.Any advice would be appreciated!!!

[tymen1]

Originally Posted by jlmac27

Hello Tymen, CONGRATS!!
I have been looking back on some of my charts and sometimes I see the middle BB going down and the macd going up.Where does that put the resultant,(price)?In your examples the resultant is always inbetween the vectors...correct?So what happens when the top vector is pointing down and the bottom vector is pointing up?

To jlmac27 and Sweet Pip :

Sorry that I am assuming that everyone knows physics. The resultant vector is always between the vectors - it cuts the angle exactly in half.
For example, if the angle between the MACD and BB is 60 degrees then the resultant slices that in two so that the two new angles are 30 degrees each.

If the BB is going down and the MACD is going up that should place the resultant level. However......................look at the two vectors carefully.
Sometimes the MACD is going down very steeply and the BB is going up only moderately. In this case we divide the angel exactly in two and the resultant is then going very slightly down.

If the BB is going up very steeply and the MACD is going down only moderately, then the resultant would be slightly up.

In each and every case the resultant divides the angle between the BB and MACD exactly in two.

To be sure, scale the charts evenly to get the vectors, ie use half your screen for the price action and the other half for the MACD. Then you can get the slopes of each exactly.

After this you can ajust the screen for better viewing ie reduce the size of the MACD chart at your convenience.

Hope this helps. Feel free to ask further on this matter if necessary - I can always post diagrams.

[jlmac27]

Tymen,

Thanks, I understand what you are saying.Were back on track now...as long as I can figure out what to do with my broker problem.

[tymen1]

To jlmac27 :

Why can you not trade Oanda next to MT4? I would have thought that you can use MT4 to do all your charting work and plot your entries and exits but then leave your Oanda platform to do only the entries and exits.

Is this not possible? If it is, then it sounds like a really good idea. Just minimize the platform you are not using for the moment on your Windows XP or VISTA.

[tymen1]

Here is another short interval showing something different.

On the chart below an engulfing pattern on the BB was spotted.
Notes below the chart >>>


By tymen1 at 2008-03-31

3 separate short entries were placed - one at the bottom, one in the middle and one at the top. Only the bottom entry was filled with the others remaining as working orders.

And look how the price dropped!! ............generating a huge profit.

Then at the label "exit 1". the powerful green piercing pattern candle (at the BB) signalled the time to enter long.

Entry 4 was taken and a nice profit realized at exit 4.