THE JOY OF CANDLESTICK TRADING - a Learning Experience

[dank]

Thanks Tymen...well, I leave the board for 2 weeks and now I have a lot of catching up to do...LOL....

Two problems after a month of demo'ing: choosing 'quality' patterns and patience...

[tymen1]

My thanks to Greywolf238, BrianSNJ, 4xStar, Croccifixio, Jaguar1175, Pseudo Straddle, Chewbacca and Dank for all your continued support and contributions.

You are the people who make this forum work.

I shall meet Chewbacca"s request to post more time details of my patterns.
They come from the Perth timeframe which is 8 hours ahead of GMT.

From there you can work out where you fit - or else download the world clock from the hyperlink below :

The World Clock - Time Zones

My court case is not yet finished. It has a second session this Thursday 5 June, when I hope it will be finished.

So it will be light posting from me till then.

[tymen1]

While I am away, it is time for all you readers to do some homework :
(typical teacher I am - giving homework!!)

So here we are :

Exercise 1

Would you trade this pattern A? Give reasons for your answer >>>


By tymen1 at 2008-06-02



Exercise 2

Would you trade this pattern B? Give reasons for your answer >>>


By tymen1 at 2008-06-02

Answers will be posted after Thursday.

[tymen1]

After doing many charts, I have noticed that the ability to recognize fine differences in the patterns and the BB/KC/Starc bands is greatly improved by colouring in the bands.

Exercise 3

So I ask you to screen print a chart such as below and send it to Microsoft Paint - a Windows program.

Then colour in every part - and do not miss even one pixel!!
This is done by clicking view/large size.
Re-colour even the bands!

This may sound like complete nonsense, but, believe me, it works.

Here is a sample of a KC chart and then a sample of the final result.
You do the same!!

First chart >>>


By tymen1 at 2008-06-02



And now, the final result >>>


By tymen1 at 2008-06-02



It is very important that you do the work accurately and do not miss even one pixel.

If you do this a few times you will notice how much better you can pick small but important differences in the patterns.
Your sensitivity to the band positions and shapes will greatly improve and thus your trading will improve.

[BrianSNJ]

I thought it was time I shared a trade I did today and I am hoping to be critiqued by TYMEN and others here.

I have included pictures of the charts. Eur/Usd on a 55 minute chart with a yellow circle we can see a Morning Doji(maybe?) Star and I decided to take advantage of it on my DEMO platform.

It is on the bands, the wicks go past the bands and the 3rd confirming candle is strong. I felt the downward trend had been a long, good one. The BBs were spread apart nicely but not extremely wide which concerned me.

I used a 10 minute chart for entry. The Resultant told me something near 1.5522 was a good number.

On my 5 and 10 minute charts, my BBs are blue and my KCs are red.

Interestingly if we look at the 45 minute chart, we could have seen a moderately strong Engulfing pattern between 8:30-9:30am. I am not sure if this truly qualifies as a Bullish Engulfing pattern. I thought so. Tymen? Any comments?

I was not signed on yet, since I had some business calls to make. I did catch the 55 minute chart and was still able to make a nice 15 pip profit. I had a stop/limit order setup to take profits of 10 pips but my DEMO platform never filled the order, so I canceled and took a market order 5 pips higher than I wanted. I got out at 1.5537...even better! lol

Here are the trade details exported from EFX platform.
Time Order ID Message Event
10:42:07 0yp0r2s:2nbb-00 Buy 100000 EUR/USD @ 1.5522 Limit on MBTX [expiring: 9/1/2008] (100000 traded at 1.5522)

10:45:47 0yp0r2s:2qaa-00 Sell Short 100000 EUR/USD Stop 1.5512 Limit 1.5532 on MBTX [expiring: 9/1/2008] Cancelled GTC

11:04:35 0yp0r2s:371r-00 Sell 100000 EUR/USD @ Market on MBTX [expiring: 9/1/2008] (100000 traded at 1.5537) Filled GTC

11:04:44 0yp0r2s:371r-03 Sold 100000 EUR/USD at 1.5537 Executed

Now, please, comments.

Does anyone think this was a good trade and followed the rules of Tymen's system or was this a bad signal?

My last picture is one of my Dealbook workspace and how I have it set up in case someone is curious. Also, I use Techsmith's SnagIt for screen shots and editing. Awesome program about $40 but does everything!


EDIT -
Sorry the pics did not come out as nice as I had hoped as thumbnails here. Below are links to ImageShack. Nice, big 1610 x 1050 shots!!!
5 minute http://img127.imageshack.us/img127/5...n622008vd9.png
10 minute http://img119.imageshack.us/img119/2...n622008pi8.png
45 minute http://img119.imageshack.us/img119/1...n622008tz3.png
55 minute http://img119.imageshack.us/img119/2...n622008hc0.png
WORKSPACE http://img161.imageshack.us/img161/8...rkspacego6.png

[Piphacker]

Hi Tymen!
I have a question about your posted screenshot's. What image resolution you use for them? I copied your screenshot's than from properties, seems they are of 908 * 567 image resulation but when i posted the screenshot of same resulations in my journal than they showed very dull result there. Only 700 * 600 suit's little batter but not like your's ...

[KENNETH LEE]

I'll give it ago ya'll laugh to hard I'll just turn my sound down..

#1 I would probablly pass on.
a. Bolinger Bands VERY wide spread and pointing up
b. #3rd (red) candle Went down but buyers pushed it back up
c. Didn't close 50% or lower than previous candle

#2 I would pass on this one also

[KENNETH LEE]

I'll give it ago ya'll laugh to hard I'll just turn my sound down..

#1 I would probablly pass on.
a. Bolinger Bands VERY wide spread and pointing up
b. #3rd (red) candle Went down but buyers pushed it back up
c. Didn't close 50% or lower than previous candle

#2 I would pass on this one also , but better than 1

a. Pattern came all the way from lower Bolinger Band line to top to quickly
b. lookind at pattern looks as if buyers are getting weak. But still able to
push 3rd (red) candle back up almost 50% back seems risky...


That's what I see... Ken

ps. Thanks Tymen and good luck with case....

[BrianSNJ]

Here are my answers teacher....LOL

For Pattern A -
I am not sure if we are counting the timeframe as a factor or not. For me, this might be a weak time in the market (Eastern Standard), if so, I would not do it.
Without time as a factor -
I can see a nice, long upward trend. I like the spread of the BBs. It looks an Evening Star but the 3rd red candle scares me. I believe it is a 'hanging man' which signals reversal during uptrend. The bottom wick is very deep but the candle did not close LOW. There is enough in this chart to like, but a lot that gives me conflict. I would not trade it because of the uncertainty it gives me. Possibly, I would trade it if a 4th candle confirms a downward trend, but does that apply to the system we are learning here? My uncertainty leaves me trading this on a DEMO only and not with real cash.

For Pattern B -

No long, strong upward trend which means market may have plenty of strength to keep pushing up. This looks like a 20 minute chart. If so, that was a fast climb up and with the patterns we are looking for, the longer the trend the stronger the signal.The 2nd and 3rd candles are almost even in movement. 3rd wick does not pass wick of 2nd candle, the close of the 3rd candle does not surpass the middle of the 1st candle.

I do not like this at all and would not trade it.

TYMEN -
Would you have considered this pattern to be a valid 'Piercing Line'. Explain please.
http://img240.imageshack.us/img240/4...inglinevt9.png

[VulcanClassic]

Hi Tymen,

Great Idea giving homework. A true teacher.

A. I probably would have tried the first pattern. The wick says downward pressure may be coming. Risk is low with a tight stop and the half amount system so what the heck. Although more confirmation would be nice.

B. BB are relatively calm and there is a spinner but that wick is a little scary sitting at the same point as the previous wick. Definite support. Probably would have waited for further confirmation.


Can't wait for the answer.