THE JOY OF CANDLESTICK TRADING - a Learning Experience

[Maverick731]

tymen sofar I've won my two day trades from candle sticks... I was wondering about how to get the best entry for day trading tho.

Would it be just liek this but I go down to say an hr timeframe?

I'm asking this in a hurry because I see 4 candle stick formations forming that I want to get into and out of before tomrrow

[tymen1]

Originally Posted by Maverick731

tymen sofar I've won my two day trades from candle sticks... I was wondering about how to get the best entry for day trading tho.

Would it be just liek this but I go down to say an hr timeframe?

I'm asking this in a hurry because I see 4 candle stick formations forming that I want to get into and out of before tomrrow

Daytrading - go down to a 4 hour timeframe if you are using a daily chart.

[tymen1]

Originally Posted by PapaJoe

Tyman,

My first post also.. First I can only praise you for all your hard work. Your teaching skills are certainly superb, and this is the very best learning experience I've seen on the internet.

You mentioned in an earlier post that the STARC bands have no settings. I use VT Trader and the STARC bands in VT Trader have setting options: ATR period. ATR multiplier, STARC band price (close) STARC band period, and STARC band type (Simple, EMA, etc)

What should I use for the settings?

Thanks,
Joe

The starc band details for you :

ATR multiplier = 2
Starc band period = 6
Starc band type = simple moving average.
ATR period = 15
Starc band price = close.

[tymen1]

Originally Posted by trav72

well the pattern isnt touching the bottom bollinger band, though it looks like entering the trade we would have been successful.
How about the evening star pattern at the end with two candles touching the upper band and the third not touching the BB and the third candle(red) only reaching midway down of the first green candle in the pattern, is this a legit evening star pattern to trade....or do we wait for perfection in the pattern?..
maybe it just does reach the criteria, though i would of liked for the third red candle to be closer to 2/3 down the length of the first..would like to know if you would trade that one for real

I screen printed that chart while the internet feed was live and that evening star was not complete yet!!
I do not know what it became in the end.

We use common sense when looking at the pattern.
The deeper into the BB, the better, but with 2 of the wicks touching here, it should be ok.
It is best if the candle bodies pass thro the BB.

[tymen1]

I should mention that in the engulfing pattern above, the red candle (1st candle) had no bottom wick.
This is unimportant - the body-to-body relationship take precedence over wick relationships.

Therefore, candle bodies can be of 2 kinds in a long engulfing pattern :

1) The green candle body is longer on both ends than the red candle body.
2) The green candle body is longer on the top but level with the red body on the bottom.

In the case of "level", the wicks become important and the lower green candle wick needs to be longer than the lower red wick.

[tymen1]

Now on with the thread.

Exercise 8

There are numbers on the chart below - one for each candle.

Which number indicates a long engulfing pattern?

Post back your answers.


By tymen1 at 2008-07-18

[tymen1]

It is important that we get our recognition skills for engulfing patterns in order first.
That is why I am dwelling on it.

The next section, on entries, is going to get considerably more difficult.

[Jimmy Jones]

I see potential engulfing patterns @ 5 and 6, not sure which one is considered a long engulfing pattern though...

I'll clarify; I still see 2 potential engulfing patterns, but neither one is a quality pattern in my eyes. #5 is too far from the bottom BB, and #6 occurs on a trumpeting BB.

Since you mentioned long engulfing pattern, that negates one of these patterns. I'm just not sure what long engulfing pattern means. I am assuming it's #5 because it reverses price action back up...

[markc]

I would say only #5 meets the criteria?

1. Because it is the only one going through the Bottom BB

2. It is the only one that meets 1 and 2 rules??

1) The green candle body is longer on both ends than the red candle body.
2) The green candle body is longer on the top but level with the red body on the bottom.

( I'm guessing the whole range is part of the initial jump from #5, with #6 just being a sideways movement but still part of the jump from #5?? If that makes sense?)

regards

Mark

[ericoco]

Numbers 1 and 5. am not sure about number 1 since the two highs are equal.