I have dropped all indicators

Hello everyone
I’ve been here for a while, still demo’ing but about to go live.
in my first month of demo, i used all indicators i ever heard of…MACD, MA’S ADX, CCI …you name it, but i realized they were all bent on confusing/decieving me. :confused:
maybe i was impatient, maybe i just didn’t grasp their essence, but in the last few weeks, i decided to drop all indicators and just trade using candles and trendlines.

now, this method seem to work as i no longer have to stay in front of my computer every now and then looking for signals, and i have recoverded some losses :wink:
the problem is; i find it difficult to know when the trend is reversing or when it is consolidating. there seem to be a lot of candle patterns, hundreds of head and shoulder pattern and sometimes, when i enter a trade, it just doesn’t work out. i once saw an evening stat doji befor on the aussie (daily chart)and whent short, onlyfor it to reverse and completely ignor me andmy doji.

i have a feeling that this simple method can be combined with an indicator to make it better.
i also think there are folks out there making it without indicators, i mean something close to this.:wink:
please can anyone give me a hint on how to finetune this method (if it’s really a method) of mine?
can someone help me out with how to properly interprete these trendlines and what timeframes to use for candle patterns?
i use the 15M time frame.

thanks for your time…and sorry about the long write-up.

Welcome to the group that does not use indicators. There are quite a few of us.

I use candles exclusively. Your time frame is good but you could add a few more eg half hour, 1 hour.

I use Bolinger bands together with the candles in order to trade from extremes. For example, a morning/evening star pattern located on the outer BB is much more likely to return to the centre.

The candle pattern tells you that you have reached an extreme and the BB then adds greatly to that probability.

I also use the 1/5 min charts to get the best possible entry in the time frame of the candle you are looking at.

Try these links.

http://forums.babypips.com/free-forex-trading-systems/2950-40-100-pips-per-day-live-trading.html

Japanese Candlestick Charting Explained

Inside Day Bollinger Band Turn Trade

I have found them all very useful.

thanks guys for the reply, am so grateful.
Tymen, pls, just to clarify, do u use this method in short time frame…30M, 15M…cos in these frames it sounds like scalping to me, and brokers tend to frown at that…what brokers do you use then? and do you glance at news release, or you just trade with the thought that all is factored in price?

DDreamer, thanks for the links, i
ve started pouring thru them already.

i have a feeling you guys have led me to it - the grail (maybe not holy)
and if i make some bucks in this, i will buy you guys a drink.:D:D:D

tymen1:

How do you do when you look at higher timeframes? If you for example want to go long are you just looking at the higher timeframe and see if the price is going up? I don’t really understand how people are using higher timeframes, do they just see which direction price is going without looking at any indicators?

Thanks

Just remember with candle stick patterns they are indications to whatever they are telling you. Like for example take a car on a hill with its brake lights on. This is telling you that the car will do something. It might go forward up the hill or it might go backward down the hill or it may just sit there for awhile. So with that half ass analogy I am trying to tell you to wait for confirmation with candle stick formations!

Have a look at this post it may give you some ideas of how
to read the higher timeframes.

http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates.html#post22738

[I]“i find it difficult to know when the trend is reversing or when it is consolidating. - Blackpips”[/I]

Ahh… The age old question, [U]when[/U] is the trend reversing… ;o)

Don’t think this has been solidly answered in 3,000 years ;o) have too many variables that influence whether the trend is turning or not. Does bad news hit right as it was thinking about going back up? Do people jump on the bandwagon at last second of a killer long as it was stalling?

I would say that alot of traders are taking Candlestick trading more serious and starting to just trade off the formations they make. Does the Doji guarantee it will turn… no. But patterns do happen alot.

Think it is best “in my opinion”, to not try to identify the turn but keep trading the trend until you get confirmation that it has indeed reversed.

Dr Pipslow in the Blogs, wrote a pretty decent article about A student trades and C student trades awhile back. Kinda thinking about that as I read this. ;o)

Forget that Perfect Trade - Pipsychology - Beginner’s Guide to Forex Trading, Free Forex Education, Learn to Trade Forex, Forex Training - BabyPips.com

There is some really good articles in the blogs section, this one in particular is just a generalization about trying to time a bottom or top, or just focusing on snagging profits repeatdly. I’d enjoyed it, thought you might like it.

Wow, what a lot of new posts since I posted the other night !! :eek:

Blackpips, My trading is basically semi scalping, 10 pips is good for me. My method uses significant leverage to adequately do the job. Of course, I am well capitalized so margin calls will not occur.

I trade in 12 timeframes from 20 mins to 1 hour periods. More is not needed and my trading is, therefore, rapid and of guerilla tactic style.

My broker, Halifax online (Australian) does not care if you scalp. Yes, I read that you have problems scalping with the American brokers.

To Ivan50 : I do not need the higher timeframes. The candlestick patterns tell you by definition whether to go long or short eg, “dark cloud cover” is a shorting pattern. There is no need to know which way the trend is going. The pattern says it for you - especially the 2/3 candle patterns.

To answer Swordofrue - I tend to trade only the 3 candle patterns. The 3rd candle gives the final confirmation, eg an evening star pattern. I also trade them only on the extremes of the Bolinger bands - in that way you get confirmation that the price has a high probability of returning to the centre.

Kangi is correct in saying that a candle pattern does not guarantee a turn or reversal. But the pattern, combined with the Bolinger bands gives you, say, about an 80% probability that it will.

To be sure, I have so far not made a single loss since I started candlestick trading. Before, with indicators, I kept on losing and boring a hole in my bank account.

I know that others are successful with indicators, I am not. Why use delayed data when you can use direct price action.
I attribute my earlier losses to the fact that indicators are derived from price action ie they are delayed data.

Hi Tymen, good idea on the bollinger bands. any specific settings you use or just the default?

I trade using:

  1. candles
  2. trend lines
  3. and S & R

Hello there Ramrocket.

Long time no hear !

I remember seeing your posts in the early days when I was not even on the forum. I followed thro and read them with interest. Then you disappeared.
Great to know you are still here.

I think of a few others that have disappeared - Pipgod is one that comes to mind.

I use the standard Bolinger band setting ie period 20 and deviation at 2.0. I have played around with period 10 but that is not as good.

I hope to soon open a thread giving my trading approach complete with charts showing the live progress. I traded a beauty the other day on an evening star pattern.

Good trading to you. !!

hi ramrocket…
could you explain the method you use, i mean how do you determine s/r lines and wht candle patterns you use.

tymen,
i have opened a demo of your system as explaine somewhere in fxtown…but
it seems to require me sitting all day waiting for the signal.
is there anyway i can use it in longer frames…say 1H to 4H.
remember you said 1H was your maximum time frame.

thanks all for your time.

I trade the 4H chart only. When I draw my S&R lines, I switch to connecting lines then switch back to candle after I am done. It is easier to spot S&R with connecting lines instead of candles. It gives you the intentional support & resistance on price. Check it out. When you switch back to candle, you will have nice set of lines on your chart.

There are many variables in trading but there are 2 things I know that price is obedient to. Support & Resistance, and Trend Lines.

Great job man on your trading. yes, its been a long time but I spent those times studying and studying - and doing my due deligence to be a good trader.

This week has been good for me as well. 5 trades 5 winners.

studying and studying

5 trades 5 winners

Wow! Thats excellent! :):):):slight_smile:

To Blackpips :

is there anyway i can use it in longer frames…say 1H to 4H.

Soooooooooooooo simple…just open a 4H timeframe and change nothing else. Sorry, you will have to look to see a pattern - unless you have an alarm for one! :smiley:

Take note also of what Ramrocket has said to you.

How long ave you been only trading candles tymen?I really want to get these down.I downloaded the book by nison.I hear it is a good read. Do you trade on the 4H and enter and exit on the smaller charts?and you mentioned you have not had a losing trade since candlestick trading about how many trades is that now just out of curiosity?Do you think RSI has a place in candlestick trading?thanks

To Jlmac27 :

Don’t know how long I have been trading candles, but I do know it is not nearly as long as I have been working with indicators.

But I am very excited about candles because they work so well. I knew about them when I started sharetrading and did my first study on them then. That was a few years ago. I purchased Louise Bedford’s book - “The Secret of Candlestick Charting” - an Australian book.

I only started using candles in detail when I made persistant losses on forex. I was using the same strategy that I was using sharetrading.

Sorry, I am not going to tell you how many candle trades I have made (I have never counted anyway) except to say it is many. With a bit of care, it seems difficult to make a loss with candles.

However, my broker also allows scalping which is a method I use. The first gained pips are the safest (hence your broker gets in first) and that is why I use semi scalping. This could also account for my success.

As I have said before, I trade on the lower timeframes - my earlier post on this thread gives you all the details. Please read all the posts on this thread - hopefully you will find it useful and interesting.

RSI useful - Well if you now have Steve Nison’s book, you should be able to answer this question for yourself. Downloaded it eh! How much did you pay? :smiley: :smiley:

Candle traders all have their different styles eg my style is different from Ramrocket and we both trade different from Rhodytrader.

thank you tymen for your post. I got the ebook off of Ares ultra.It is a file sharing site so it was free. I have not read it yet but will be real soon here.I have just went back and found time frames 1 H 30M 15M 1,5 M to enter ,exit.I must have been reading before but not paying attention to what I was reading,it is late here LOL.
Yeah I am very interested in candles.I have played with indicators and I get so many going at once it fills my screen.I know alot of people here say keep it simple and candles seem pretty basic stuff.After of course you learn the patterns.I am a newbie but really wanting to learn this.My broker is GFT,they use a spread of about 3-4 pips depending on pairs.this won’t get me in to much of a hang up will it? Well thanks again tymen, you take care

jlmac,

The candlestick is merely a representation of price. It measures the relationship of the closing tick in relation to the open, high & low. Same as a bar does. Some folks (including me), find the visual definition more appealing, but it really doesn�t matter which visual you choose, they both do the same job.

As with all price action observation, what really matters isn�t the individual bar or candle print, but the collective bars/candles, & their vicinity to key levels or zones on the technical map.

A couple doji�s or spinning top�s appearing on a 5min chart in the middle of a mini trend run won�t particularly represent anything other than temporary relief in near term price activity.

The same combination printing on a 240min or Daily chart at a Big Figure/Round Number, and/or previous area of stiff s&r however, will carry far more weight & attract keener interest.

The bars/candles are mirrors of trader psychology. Nothing more scientific than that.

If you focus more on where & why they make their respective patterns & less on the actual (individual) candle print, you�ll glean far more constructive benefit from your observations.

Indicators work exactly the same whether you choose bars, line or candle observations. They�re simply price aids, nothing more. They won�t offer any additional benefit or head start into a trade. You don�t need them at all to be honest, & I�d go as far as to say that they�re actually counter productive.

If you spend time researching the relationship between price, the pertinent levels & the psychology of why it reacts where it does on a consistant basis, you�ll gain far more bang for your buck!

Get yourself a real good handle on psychology.

Ensure you fully understand & appreciate your own individual place in the trading puzzle as well as a heads up to why folks react the way they do to specific price action triggers.

90% of this business is won & lost inside your head. The savvy players out there know exactly who will react to a certain event & why.

They use price action (candlesticks or whatever) very differently indeed to the way it’s acknowledged on most of the trading forums :slight_smile: