THE JOY OF CANDLESTICK TRADING - a Learning Experience

[FXCaribbean]

Originally Posted by VulcanClassic

FxCaribbean,

Just curious where you are in the Caribbean?

In the middle of the bow : Guadeloupe = French Island.

[tymen1]

Originally Posted by Pilgrim

Tymen,
It is obvious that you are an excellent teacher. ..................................... I just wanted to say Thank you! ............................................. I think I have saved myself from a lot of frustration, confusion, and disappointment by starting with your strategy. It is amazing that I can live in West Texas and receive instructions from you in Australia.
Thank you!
Bruce

Welcome to this thread Pilgrim.

Thank you so much for the compliments.
I will use my skills for you readers, to improve your trading and help you make lots of pips.
Traders that make good profits from my teaching give me much satisfaction.
It also shows that we are going in the right direction.

[tymen1]

Originally Posted by FXCaribbean

Hi,

Here is my first questions on the ultimate method...
As everyone can't stay in front of his computer all the time, ......................

My thread teaching the use of candlesticks on a short time frame is designed for people who wish to make Forex trading a career.
Full time watching is part of this work.

When finished, we can expect up to 4 patterns in any 6/8 hour period and to make between 40-180 pips on each trade, depending on your skill and the power of the trade.

A full standard lot is used when finished, that is, 2 amounts = 1 standard lot.
Then 1 amount = 5 mini lots.

With such statistics, it becomes possible to each up to $7000 USD maximum, in any 8 hour period.
This may seem absolutely incredible, but it is really possible.

That is why I do not see the need for long term patterns, since this money is made very quickly on these short term patterns.
Approx $500 USD per hour trading is not unrealistic.

............................, can i conclude that even if one is late entering the UM, then he missed the first lot, he still can enter at the re-trace hit with the 2 lot ?

I like your abbreviation - UM.
I think I will use that.

So from now on : UM means Ultimate Candlestick Trading Method.

You are correct.
You can enter at the retrace point with 2 amounts.
There is nothing to stop you.
You will just make less pips than if you entered on time.

The ultimate method is based on Evening star and then we go short. Why this short choice first ? I ask because, at first sight, going short as a beginner was frightening me more than going long ! Would you say that short is much more positive than long and you are much more confident with this reversal pattern ?

The evening star is a good clear pattern to start with. It is also a very powerful pattern.
Trading short is no different from trading long. The level of difficulty is exactly the same.
Turn you chart upside down and short becomes long and long, short.

[keitsuke]

Just wanted to drop a note to say what a great job Tymen has done. I don't post much but I'm always floating around reading and learning from this thread.

I'm also going live with GFT this week. Wish me luck.

[FXCaribbean]

Originally Posted by tymen1

Full time watching is part of this work.

ok

Originally Posted by tymen1

When finished, ...
Approx $500 USD per hour trading is not unrealistic.

Ok and it comes with practice, practice and ...practice.

Originally Posted by tymen1

I like your abbreviation - UM.
I think I will use that.

So from now on : UM means Ultimate Candlestick Trading Method.

Really honored ...

Originally Posted by tymen1

You are correct.
You can enter at the retrace point with 2 amounts.
There is nothing to stop you.
You will just make less pips than if you entered on time.

Sure, it was just in case one missed the start, what happened to me yet while i wasn't looking at the charts continuously. Half pips is still better than none

FXCaribbean
"Don't go where there is a path. Open a new one and leave a trail".

[tymen1]

Now to explain how to use the 5 minute Keltner chart to get the best long entries.

Again we set up a 5 minute chart with the Bollinger bands and the Keltner bands with period 4, factor 1.

But the Di Napoli MACD, as it stands, will not work.

In its normal state, we use it for short entries.

We need to set up the Di Napoli MACD for long entries.

This is done by turning the MACD upside down.
How do we do this?

First, by finding what the values of the Di Napoli MACD are.
They are :

long moving average = 17.5185 (17.52)
short moving average = 8.3897 (8.39)
signal = 9.0503 (9.05) - not needed.. Make this one invisible if you can.

To turn this MACD upside down we invert the values, as follows.

long moving average = 8.3897 (8.39)
short moving average = 17.5185 (17.52)
signal - not needed

By doing this, we get an inverted MACD.

See next post.

[tymen1]

This is a picture of what you get when you invert the MACD >>>


By tymen1 at 2008-07-21


The red MACD is the original Di Napoli MACD.
Note that you cannot put the inverted values into the Di Napoli MACD.
You have to open a new MACD to put the values into.

The green MACD is the result when you put the values into inversion.

By doing this we are now ready to set up a 5 minute chart to trade long.

On the 5 minute "long" chart you have :

The Bollinger bands - standard values as before.
Keltner channel - period 4, factor 1 as before.
Inverted Di Napoli MACD - long period = 8.3897 and short period = 17.5185.

You can set both the MACD's on the same chart and expand/contract them as needed. (On the above chart, the candlestick chart is contracted or minimized - you can see the colour bar above the MACD's).


When it is time to enter a trade, we do exactly as before.
We draw or note the middle BB vector, then draw or note the inverted Di Napoli MACD vector.

The resultant will give us the best possible long entry price.

A note on resultants next post.

[tymen1]

A note on resultants on the 5 minute KC chart for long trading :


VECTOR ...............................................RESULTANT................BEST ENTRY
mid BB up, inv MACD up...............................up............... .........upper Keltner
mid BB up, inv MACD slightly up.....................slightly up...............near upper Keltner
mid BB level, inv MACD level..........................level.............. .......mid Keltner
mid BB slightly down, inv MACD down..............slightly down...........near lower Keltner
mid BB down, inv MACD down........................down.................. ..lower Keltner


Note that this is exactly the same procedure as for trading short, only that we use an inverted MACD.

FXCaribbean asked why we started trading short first. Now you know.
By trading short we used a straight Di Napoli MACD.

By now going long, we have to first learn more by developing an inverted Di Napoli MACD.

[tymen1]

To Keitsuke :

Congratulations!!

A word of strong counsel :

For the first 10 or so trades, trade the smallest amount you can.

This is so that you can "practise" live trading.

Be prepared for slippage.

Be prepared for the entries and exits to take longer than on a demo.

Be prepared for screen freezing.

Keep a sharp watch on your floating profit/loss.

I am not saying that the above problems will occur but be prepared just in case.

Also very important - know how the "re-login" function works in case you need it.

[FXCaribbean]

Hi,

Here is a snap of my current screen.


By fxcaribbean at 2008-07-21

It is GBP/USD, 5mn with the new tymen's settings.

I wrote the number 1 where I beleive the engulfing start.

Then if i try to guess the direction following the guidellines, I have it wrong looking at the purple arrow ...

Where did i miss something ?

FXCaribbean
"Don't go where there is a path. Open a new one and leave a trail".