Hello everyone. I’ve been trying to find insight on candlestick interpretation related to signal formations and the presence of wicks. I use a simple Price Action strategy on the Daily charts.
How do you take a wick into consideration for a potential signal?
I’ll use the Pin as an example. All of the graphics I have seen in the various things I’ve read have shown a pin to be a wick on one end, with the body of the candle only on one side, and no wick on the other end. However, in the past 9 months, I don’t think I’ve ever seen a pin candle that looked like that. Instead, it’s usually long wick on one side, small body, and then a smaller wick on the opposite side.
How do you guys use the wicks when considering a potential trade?
A better candlestick to look for on the daily charts is the bearish/bullish engulfing bar, zero discretion is involved… On the NZDUSD trading this candlestick pattern alone with a 100 tp and 100 sl will give you a couple hundred pips per year since 2005.
Aye, I’ve been trading on OANDA which close theirs in the middle of the night. I’ve recently started shopping around for a US broker that closes their daily candlestick after the NY session.
Hi there, I really want to learn how to trade a price action strategy and wondered if you could point me in the direction of a good course or person/mentor - have you had any dealings with Johnathon Fox or Nial Fuller and would either of those guys be any good for me. I am a beginner really.
@leckya: Do the school of pipsology that these guys offer for the basics. I’ve read pretty much all of Fuller’s website and feel it is an excellent resource for learning Price Action. I’m not familiar with Fox at all.
spend your time initially reading threads here or on other forums. apply what you learn on your own charts and spend more time on this part. see if you still feel the need to find a mentor after all these.
I do agree with Fring with one caveat. I spent the better part of a year just reading and studying to teach myself what was going on. There is so much information available that it is difficult to put it all in proper perspective. I did end up signing up for a mentor-style website for a few months and feel it was a great value because the guys that ran it were very good about showing you how to apply that knowledge in a live setting. It was a very beneficial approach for me anyways.
@Leckya: You’re welcome! There is plenty of great information out there. Just don’t let yourself drown in too much information. I like Price Action because it’s relatively simple compared to other strategies.
you were very lucky to have found value in your mentorship.
others I know were not as lucky early on (some, entirely unlucky).
my post was meant to shield new traders from making costly mistakes by jumping immediately to mentorship or courses (not different from going live immediately with big amounts of cash). I know a few who sell courses or training materials - contents of which are freely available on the internet - for a good amount.
i agree the drawback to going solo is encountering the huge pile of trash around before finding a small pot of gold. a delicate balance and a good amount of discretion are definitely necessary.
I definitely understand your point and agree with you Fring. It didn’t occur to me that I spent probably a good three months researching various mentoring websites/mentors before I found what I felt was the right one. Forex Mentor Pro membership was 50 a month after the trial - and worth every penny. What impressed me enough to make them my first (and only) try was the genuine way the owner spoke in his “choose us” video. It was a very grounded, down to earth presentation. I work in web-based marketing as my “day job” so I’ve grown pretty accustomed to picking apart manipulative advertising.
The way they were set up is that they had a couple traders who used different systems and provided thorough explanation on why they were making the choices they were. Each of the systems provided several support videos which explained the hows and whys behind everything. Which is essentially what I was after, I didn’t want a tip service or just be told what to do, I wanted to learn how to be successful. I would highly recommend them to anyone that has learned a lot but still has no idea what they’re doing.
Even the trial is very worthwhile since you have access to everything.
Candlestick reading is the absolute fundamental thing you should understand in trading, however you should also be aware of it’s limitations, I always use ‘pinbar’ as a loose term meaning a narrow spread candle with a proportionately long wick in the direction you expect the market to reverse. I’ve seen 'system’s that define a reverse candle as the body having to be less then 50% and there must be a small wick at the bottom and the top wick must be at least X, well that’s garbage, as if a 2 pip difference on the 5min chart on a pinbar will have any bearing on the future price action. Your candlestick must also have time and chart position taken into account.
But also what I don’t see very often, and hardly at all actually is about full bodied small wick wide spread candles, not to be used for entries, but to stay in trades, these type of candles indicate a strong move and you should stay in that move until you can see any weakness in that move, so often I see charts posted on here, Oh had a great trade, took 55 pips, best trade ever, blah blah blah, but they have exited on full bodied candles, it’s purely a newbie mistake, all the ‘excitement’ of getting a good trade, and then leaving half of the pips on the table, because of the fear that since the market has moved so quickly in that direction it will move back just as quickly - IT WON’T, full bodied wide spread bars - strong move stay in there.
Not sure about Forex Mentor Pro, I can tell you as FACT there is better methodology available for free on this forum, staring you right in the face, look out for the very most popular threads on here, they are such for a very good reason.
@PPFX: Thanks for your input. That was a very insightful, helpful post. I definitely agree with you that understanding Candlesticks is probably one of the most important parts of forex trading right behind mastering the personal psychology.
It’s not one of the most important part, it’s basic, it’s a part that needs to be understood, but it’s just another piece of the jigsaw, you need all the pieces to get the full picture.
Can you give some visual examples of your full bodied candles, as I never have taken any interest in what candles look like. Silly as it may sound, I’ve been using the same method for around two years now, and I only use a line chart, no candles on my screen! But as you said, if anything can improve exiting trades then that’s well worth looking at.
