THE JOY OF CANDLESTICK TRADING - a Learning Experience

[VulcanClassic]

Thanks again Tymen,

"I want patience and I want it now!"

[Ray_1]

Originally Posted by tymen1

To Ray_1 :

Candlestick trading and indicator trading are very different. The first is a chart of emotions while the second is a chart of computer calculations. As such you cannot really mix the two - there is little common ground between them.

The Bolinger bands are a probability envelope that tells us when price action goes to an extreme. The BB are a lagging indicator like all other indicators. The lag in the Keltner channel is reduced because of the way in which it is mathematically constructed.

As a new poster, I feel that I need to take you in hand and contribute some useful tips.

Firstly, I would ask that you remain a person who can be moulded ie open to advice. People who are hardheads on this forum (there are some - I know who they are) pay for this by losing all or most of their money. Do not be in that group!

Now a list of suggestions in logical order :

1) Read again my post explaining candlesticks with reference to the magnetic field from physics.

2) Read also my earlier post explaining the advantages of candlestick trading.

3) Decide whether you want to be a candlestick or indicator trader. If indicator - then proceed to the many threads on this forum. They all use indicators.
If candlestick - then read this thread, starting from the beginning and read all the hyperlinks posted as well. This will take time but you will learn.

Hi tymen1,

Thanks for your guidance. I tink i will go through your thread all over again and learn more about candlesticks first before making any decision.

[KENNETH LEE]

Thanks For all your insight Tymen,, Just found this thread yesterday. So I printed the whole thread and read it last night.. I always have looked at my charts as through the eyes of the other ( players ) and look forward to more on that subject.. Again Many Thanks for all your doing..

[bernbeach]

Originally Posted by tymen1

I had a read thro my latest posts today.

[b]I was horrified to see that my posts appear to have come thro as arrogant, self rightous and pompous
In typing enthusiastically, I come thro with entirely the wrong attitude.

I humbly apologize for being arrogant.

I [u]apologize if I am perceived as being self rightous.

I [u]apologize for appearing pompous.

Of these attitudes I repent and seek to be more humble.
If not, the market will soon humble me, but I want to be humble first before I lose all my money.

If the readers here are learning more about candlesticks, then it is I who need to learn more also - about humility !

Tymen, by your humanity, your modesty and expertise. I was out of the forex for more than a month and to-day enjoyed reading all the last posts. I do not master it fully, but it all gives me a sense of confidence and trust. I truly find you a man planet earth needs dearly to get out of the mess we all created together.
Of all my profits I will start tithing 10% and more to life enhancing organisations. I will definitely place the gifts on the site, so we can all share a part of our earnings (more than 3/4 of humanity has NO access to clean water... What you do Tymen is definitely a tithe in your own way to us. Infinite gratitude. I enjoy a personal contact with you again (we started one last month) on my address: bernbeach@telenet.be. Belgium in E.U.
Bern

[yuv]

hay guys, i have been trading off this system and i hope you dont mind me sharing my trades. i just wanted to share it with you guys. the system is stress free and very easy to apply. but little bit of patience required though.

so here they are:

totall trades = 8(71 pips)
Losses = 3(-12 pips)
success = 5(+59 pips)

bare in mind the losses were because of my own fault of being strict with the stop loss. those losses went down on me as the system predicted but my stop losses werent according to the system. they were too close.

the successfull trades are all based on tymens great system which worked like a charm for me at least.

the only thing i get stuck with this system is the exit. i hope tymen could post about exits more in detail.

keeep up the goood work tymen and thanks again.

[tyrant_ragg]

Hi tymen..... again,

Just like to comment that this thread is the most informative one. A true learning experience.

I have some question which i can't seem to find the answer in the thread. When the market going down, it is having a hard time reaching the upper BB so we'll have a hard time going short. So bars and patterns will mostly be in the lower BB but going long means trading against the trend. Same as the other way when market is trending up. So, my question is, should we trade regardless of the market trend as long as the pattern is strong? Aren't we going to get fake-outs when we trend against the market?

[cbarnett808]

I had my first success with this system this morning:

EURUSD evening star completed at 13:00 GMT on the 30 minute chart.

I entered at that time using the 5 minute vector, which gained me a couple pips over open. I closed at 10 pip take profit and finished getting ready for work.
The candle came roaring back, but I was already out easy as that. The candle did turn back down, but staying in longer than necessary to take a small gain is where I think trading turns into a crapshoot.

This looks like it could be a lot of fun. It makes me think of fishing for some reason- you have to be patient and wait for the bait to get taken. Then you set your hook, there's a short burst of action, and hopefully you have something on the other end.

Thank you again Tymen.

To TyrantRagg:
I certainly cannot speak for Tymen, but my opinion of the trading against the trend issue is this- If you are trading the big four (EURUSD, GBPUSD, USDCHF, USDJPY), you will notice that the USD tends to be the lynchpin. Since it is the base currency on two pairs and not the base on the other two, the pairs tend to move in opposite directions. In other words, the EURUSD and GBPUSD tend to move up at the same time that the USDCHF and USDJPY move down. Therefore, one set of pairs or the other SHOULD be at the upper BB when the other set of pairs is at the lower BB. What I plan to do is trade only one of the pairs that is at the upper BB. I believe the bull setups tend to be 'shakier' than the bear setups, so I will only concentrate on bear setups.

I hope this is clear and invite anyone else to comment. Please remember, none of this is exactly a science (and I'm certainly no scientist)!

[tymen1]

Time for replies :

To KENNETH LEE :

Gee, I hope your printer is still ok !!

To Ray_1 :

Take your time and make your decision carefully. All the best!

To Bernbeach :

Thank your for your powerful compliments. I promise I will not let it get to my head!!

To Yuv :

Yes, I think we would all love to hear about your trades - you will have several thousand viewers with all manner of suggestions pending!

To Tyrant Ragg :

Do not dispair!

There is a candlestick pattern just for the lower BB. It is called the "piercing pattern". You look for it when price action hits the lower BB. When you see it you then trade long. Great success!

So there are patterns for going both long and short.

Shorts done on the upper BB - evening star, dark cloud and engulfing.
Longs done on the lower BB - morning doji star, piercing pattern and engulfing.

Note that the engulfing works both ways.

[tymen1]

Just before I go on, I would like to draw all readers attention to a thread just posted.

It is given in the hyperlink below.

It is very revealing - only 3 posts. The first is a Newbie asking a question about indicators and the 2nd two posts are replies from two of the best experts on this forum.

The answers speak for themselves...........a must look !!!!

Indicators?

* *

[tymen1]

Now the next series of posts, although for everyone, are especially dedicated to Vulcan Classic who is determined and wants more skill and to Yuv who wants to know more about exits.

So I have found a trade this morning (Thursday 10), in EUR/USD to help answer the call.

It was a very powerful and dynamic evening star trade with heaps of stuff in it that gives room for great teaching. The charts are 20 minute charts.

So I am going to go thro this trade step by step and cover many points.

I will cover especially :

1) Quality candlestick patterns.
2) How to set stop losses properly.
3) How to do exits - more on exits.

There were 2 evening star patterns closely following each other. The first was excellent but I missed it because I was on the Australian share market.
That market is looking like one sick puppy at present!

The 2nd evening star pattern is the one under consideration. I did not feel that it was a really good one so I traded it on my demo platform - nevertheless, I had success.

Without further ado, lets look at the features of this trade ...................