OK a few months ago I gave up on most indicators and decided to go with candles. I have read some books and watched some videos. My only problem is with the charts you see in books you get the example in middle of the chart and it is easy to see what you should have done when the chart is complete on the right side of the candle in question. So for all of you candle experts out there I am posing a test for you. Here is a day chart of usd/chf tell us what you think of it.
It’s difficult to see your chart properly due to the screen capture density used + the array of indicators blurring the visuals!! 
As to what I think of it?? Well, it�s Dollar bearish! And it�s threatening yearly lows @ 1.1620.
So, the price action is reflecting both technical & fundamental sentiment, yeah?
Certainly since end of 2nd quarter, the bearish daily candles have outperformed the bullish candles, again signifying downside momentum & bias.
If you flip back a frame to your 240m chart it’s showing lower highs & lows, with a slight pullback off the yearly lows from 1.1622, which ran out of steam @ the 50% Fib from the last significant swing top.
Given that simple chart observational reccy, where do you suppose the weight of momentum currently lies? to the upside or the downside??
In other words, if you were seeking to place the odds in your favor & obtain the best bang for your buck, which directional bias would you be looking to trade? Short or Long this instrument?
So, taking your lead from your Daily chart & it’s directional bias, whilst drilling down a timeframe or two for confirmation maybe?, what kind of price activity would you be looking for to stir you into action??
If you chose to leg into ‘shorts’ & run with the flows - what would your Plan B consist of if things failed to go to plan??
In other words: what would influence your decision to cut your ‘short’ position, reverse tack & begin considering longs??
Hi Jocelyn - as I would expect you have given a really nice demonstration of the information that can be gained from just being able to read a chart. The conclusions will be obvious even to fairly new traders. It takes little to see that the momentum is down, there is a clear trend and there are a number of trend following techniques on the forum that could be used if people dont have their own and the need to reassess at the yearly lows again becomes commonsense and might possibly lead to a long bias
OK a few months ago I gave up on most indicators and decided to go with candles. I have read some books and watched some videos. My only problem is with the charts you see in books you get the example in middle of the chart and it is easy to see what you should have done when the chart is complete on the right side of the candle in question. So for all of you candle experts out there I am posing a test for you. Here is a day chart of usd/chf tell us what you think of it.
On the BB it looks overbought but on a daily chart that can go
a whole lot further
Take the macd off, the fibo, increase the size of the candles,
put some S/R lines on it. Then drill down to the 4hrs chart, 15M,
5M maybe, show a stoch at the 15M level then and maybe only
then would I even attempt to make an assessment.
Also this is not a chart I am familiar with I would need to take
more than a cursory glance at it.
I feel sometimes that when it is said “I now am only using candles to
determine my trades” traders take this too literally.
Nobody casts away all TA indicators, we make an assessment on a
whole range of different criteria.
But I feel we are saying more “I am now looking more at price action
rather than regressive indicators, ossilators etc. to make a full rounded
decision”
I have reproduced a chart from a trade earlier in the week tell me
what happened next? The orange line is a S/R line.
:wishes:
Lots of good advice hear. But did I expect anything different? Jocelyn you breifly mentioned that the USD is at a yearly low and make a good argument for selling. But did you forget that the US just started the Presidental election process. The real election is not until november of 08 but they started campaining last month. So I have a feeling the the dollor will stay around the level its at or drop some more until Jan of 09. But I have not been in the forex long enough to go through an election. As for your question what is my plan B? I would go short with a s/l of 100 pips. Since there is a tweezer top at the 50% fibo mark I would go long if it moved past the 67% fibo mark, with 100 pip s/l.
However I think we got too much info on this post. I know that you should not rely just on candles. My question is I am having trouble identifying all the different types of candles, and what the recommended play should be if you were only looking at candles.
So the next question is should we post some more charts to identify candles?
The first problem with your chart is the clarity. I trade with a white background as I have done optical tests on this and found that it is definitely superior to a black one. Yes, black is pretty, it looks as though you are trading in space - but it is inferior on the eyes.
I trade without all those indicators - only need the Bolinger bands. On your chart, Bazooko, I would not do anything except wait. The last 2 candles indicate a further downtrend but nothing is for certain here so I believe waiting for more candles is the best position to take.
You do not need more charts right now, just more candles to come to see the next pattern.
i have been looking at this candle stuff, and i feel there should be a ****tail of indicators that could enhance candle-based decisions like you said, i havn’t found it yet, but i will, hopefully.
and based on ur question, i think a tower top formation just formed and that price will consolidate sideways and go south to retest the level it bouced from…hope i am right, let me know if i am not.
Jocelyn,
where can i get a hold of significant historical prices, and how best do you think i can apply them to my trading?
pls reply, i am behind on my timeline to go live…i really should have gone life by now.
o
thxs all, and i thinks its a nice thread.
and based on ur question, i think a tower top formation just formed and that price will consolidate sideways and go south to retest the level it bouced from…hope i am right, let me know if i am not.
That is the way the chart was indicating, going south, plus
it still is at the moment. But looking at just one chart timeframe
& making a decision is ludicrous. If you read Jocelyn’s Tess’ & Tony’s
posts you can see the amount of TA plus fundamental knowledge which
should go into all analysis.
That is what needs to be learned, not looking for some "jackpot"
system which is going to “miraculously” give the user a billion dollars
in three “easy” steps.
There are no “easy” steps to success in Forex.
where can i get a hold of significant historical prices
Metatrader4 but you will also need a data feed, google MT4, I use
Alpari & North Finance.
That is what needs to be learned, not looking for some "jackpot"
system which is going to “miraculously” give the user a billion dollars
in three “easy” steps.
Sorry, daydreamer I was not trying to suggest that you can make a winning system using just candles. I was just looking for some guide lines on the candles. You know like when they say buy when macd is over 50 but less than 70. Just looking for some real life examples of candles. I picked the candle I posted because it is an unusal one that I have not seen in any books.
I think candles can be useful when used the right way and I just want to clear some things up.
I am one of those people that uses only one indicator with my candles - the Bolinger band. I have absolutely no use for the rest. Yes, I do use more than one time frame.
So far, I have been very successful with my trading - not having lost a single trade out of very many. But then, I am basically semi scalping.
This is a very interesting thread. I am glad that you have posted it, Bazooko.
That is all you use huh? I think I remember reading a different post stating that.What settings do you use on the BB?I am trying to figure this out.I have been trying candles,S/R,EMA’s.I just can’t seem to find what I am looking for.Can you give a brief description of a trade,what you look for with the BB’s and so on.Thanks tymen, your help is appreciated!
ok, to start with I use standard settings BB ie period 20, dev 2.0. I have tried other settings but they really become redundant - the standard is as good as any.
Please note, my method is semi scalping. I think most people would not like this.
I use a 3 step approach :
-
Look for the candlestick pattern in a good timeframe (20 mins,1hour,4 hour, daily). I personally use 20 mins thro to 1 hour.
-
Look for the candlestick pattern [U]only [/U]on the Bolinger band. If it is [U]not [/U]on the BB, i take no notice of it. I use only the 3 candle patterns and wait for the 3rd candle to complete so confirmation is made.
-
I turn to the 1/5 min time frames (complete with BB), esp 5 min to see what the immediate price action is doing. If it is walking the lower bb then enter immediately when the 4th candle starts. Collect profit after about 7/10 pips.
If it is not walking the lower bb, the I wait and judge the best entry position by examining the price action - this is a bit of an art and comes with practise.
I do not set a stop loss as such but rather rely on the bb to show that price action has reached a limit. Further, I wait a maximum of up to 7 candles to allow for profit to develop. After then, its loss material.
So far, I have not had a loss - and I have entered some very precarious trades!
The skill is in judging the correct entry point. I hope to start a thread of my own soon showing my approach complete with charts. At present I am still fine tuning a few points.
Very good,thanks for the insight.I like what you are doing here sounds interesting.That would be cool if you got your own thread going ,when ever you think it would be ready for one.you build it and they will come!thanks again I will mess around with this for awhile.goodtrading!!
To Jlmac27 :
Where abouts are you based? Your quick replies suggest you are in a time frame very close to mine.
I am from indiana U.S I stay up late sometimes reading and demoing,regreting it the next day to go to work.:eek:
referringYou say only enter a trade when the candle is on the BB,are you referring to bottom or top BB? So you make sure the 5 min. is riding the band then on 4th candle place contract.What candle patterns are you referring to?I know a couple, I have done a little research on the candles but just getting into them I have steve nisons book,I have yet to read though,probably should get on that huh?? thanks tymen goodtrading!!!
You say only enter a trade when the candle is on the BB,are you referring to bottom or top BB? So you make sure the 5 min. is riding the band then on 4th candle place contract.What candle patterns are you referring to?I know a couple, I have done a little research on the candles but just getting into them I have steve nisons book,I have yet to read though,probably should get on that huh?? thanks tymen goodtrading!!!
I feel slow in the head right now,my post I put up isn’t clear and posted it twice AAAAAAAHH!! When I say top or bottom BB’s I mean that’s when you enter trade when riding top or bottom,what importance does the middle line have to you?thanks again!!Sorry for the musical posts!!
jlmac27 have a read of this article it may throw some more light
on the subject.
Using Bollinger Band “Bands” To Gauge Trends
You should also read this article.
Japanese Candlestick Charting Explained
:wishes:
Thanks,I read over that stuff. I am currently reading steve nison book on candlesticks I just started today on it so I am excited to learn from it.I am just trying to find the best indicator to go with candles I will look over the BB’s.