THE JOY OF CANDLESTICK TRADING - Part 2

[tymen1]

Hello there :

Well this thread on candlesticks is now here as promised. Indeed it has had a long gestation period. I have prepared many charts beforehand especially for this thread.

Now this thread is for all to post and all ideas are welcome.

Like everyone else, I started out with conventional indicators and soon became frustrated with many losses on forex. I already knew about candlesticks from my share trading and it was only a matter of time before I looked at and studied candlesticks because I was losing with indicators.

Candlesticks give up to the second information whereas indicators only tell you things upon the close of a bar. So candlesticks are completely up to date whereas indicators are basically delayed data.

Would you trade the sharemarket if your prices were delayed by, say, 20 minutes? NO WAY! So why do it with forex?


This thread is different from all others in that it it pictorial, that is, I explain things using charts and diagrams.

A picture says a thousand words.

This also overcomes the problem of people from other countries having difficulty with English.

The charts will be slowly posted, one by one.
Other posters are welcome to do the same so that we candlestick traders can all learn from one another.

LET THE CANDLESTICK TRADING BEGIN

[tymen1]

My opening post will be a warning about flaming.

I want this thread to be a high integrity thread.

Coming back from my holidays, I am horrified to see blatant name calling on one of the threads on this forum and am wondering why the admin has not banned the posters.
I guess it is me that will again have to deal with it and alert the admin.

If anyone even hints at flaming on this thread, I will report them to the admin immediately.

I look forward to good discussion, on topic, and strictly to the point without waffle.

[tymen1]

To post my charts and diagrams, I have traditionally used Image Shack.

I have recently discovered Photobucket and they appear to be a much better image hosting website.

Their downloading is much more up to date and thier website is much more user friendly.

As I am most certainly the biggest user of image hosting on this forum, I welcome any other websites that readers have found and consider excellent.

[tymen1]

Have a look at this............


By tymen1 at 2009-01-16


Which group do you think you are in?

Since I arrived on this forum, the number of new posters has increased enormously.

We know that forex is a closed loop.
That is, your gain is someone else's loss.

In that sense I suspect that a lot of the posters here now will not be here at the end of the year.
We have no idea as to who will drop out and who will survive.
It is wait and see.

However, if you follow this thread and become a dedicated candlestick/price action trader, then you will have a powerful edge or advantage, and the probability that you will survive will be greatly increased.

[tymen1]

Now I am a retired high school teacher and present my material just like a typical teacher.

This is Part 2 of the Candlestick trading thread.

In order to properly understand it, you will need to fulfill some prerequisites.

Prerequisites :


1) Being familiar with, and preferably, having used the strategies in the ULTIMATE CANDLESTICK TRADING METHOD - 4 levels.

This Candlestick method is given in the Acrobat reader file below.



2) Having at least studied :

THE JOY OF CANDLESTICK TRADING - a Learning Experience

referring specifically to pages 140, post #1420 to the end of the thread. (page 170).

These pages consist of live trading examples using the Basic, Intermediate and Advanced trading levels.

[tymen1]

Time to start Part 2 proper......

I wish to make a number of modifications to the Levels.

For Basic and Intermediate, the modifications are superficial. A second multiple amount strategy will be added to these.

The Advanced level will be looked at in detail, in regard to the Starc bands.
Alterations will be made here to make entries and exits simpler and smoother without losing pips.

[tymen1]

Improving the Basic Level

In this level, we look for a pattern, and enter 2 amounts upon the new candle.

The 1st amount is cashed out at 10 pips and the stop loss is brought to break even.

The 2nd amoount can then reach its final target profit or
return to break even for zero profit. (leaving 10 pips profit on 1st amount).

This 2 amount strategy has the effect of giving us a profit edge, even over a long period of time - a win/loss ratio of at least 60/40.

A single amount trade strategy will produce wins but may see you lose money in the long run.
That is how traders drop out of forex - they win in the first few months.
(Yay, I have a winning system!!)

But as time goes on, reality sets in, and overall there is a loss.

I will call the above 2 amount strategy....... Strategy A.

In my next post I will start the pictorial by introducing Strategy B.....

[divyesh]

Hi! Tymen, welcome
I am a newbee and eagerly awaiting for your posting THE JOY OF CANDLESTICK TRADING PART2. I have gone through your earlier post " The joy of candlestick trading part 1" and thankful to you for the wonderful posting. I think this new thread will enlight our knowledge.
Thanks once again.

[tymen1]

Thank you Divyesh .

I hope you enjoy your time here and maybe you will become a candlestick trader!!

[gasanvill]

Hi tymen!

I have opened my live account a month ago and i have found that candlestick patterns are so important! I´ll read the first part of candlestick trading the faster i can, so i can participate here!

Thanks for sharing this stuff with us!