Is It Feasible to Only Trade Candlestick Patterns/S&Rs?

Hi all,

In your experience, do you think it’s feasible to trade with an acceptable win:loss ratio using only candlestick patterns and S&Rs?

Personally, I am not a huge fan of indicators - while it seems that a lot of people use them, there appear to be just as many experts who prefer not to rely on them and stick to candlesticks for much of their analysis.

To give you a bit of insight into my trading style, I aim to close my positions within a day and generally try to trade off 30M/1H charts. My approach is to identify S&Rs, then look for candlestick reversal patterns nearing the S&Rs, wait on confirmation and let it rip.

In theory, my profit would effectively come from pingponging between Support and Resistance areas; and as a firm believer in technical analysis, I won’t focus on any particular currency and instead try to trade any pair that meets the aforementioned criteria.

Now, I’ve been trying it for the past few days and I’ve been moderately successful, though my win:loss ratio is still below even 50%, so it’s clear that I:

a) have a REALLY long way to go
b) working off a flawed system that’s simply not workable

If you think this approach can be used successfully - or if you believe it’s a waste of time - please let me know.

Demo trade it for 6 months and you will have your answer.

I do believe it is more than possible to be successful in the method you have mentioned.


Candlestick formations combined with S/R zones sounds to me like a very viable basis for trading.

I personally have gone through all the time frames and ended up where I began, with 4H and dailys. I also use some VSA (Volume Spread Analysis) along with trendlines.
Other than that I pay attention to chart patterns and to the overall strength of the currencies - if you’re looking at EURUSD, you may get clues by checking how these two are performing against other currencies. If you’re thinking of going long, but suddenly notice that EUR is falling against JPY, GBP and maybe AUD, you might start questioning the strength of EUR and the wisdom of trading it long even if it happens to look promising in the EURUSD pair.

The foundation however is definately S/R and trendlines. I think this is a very healthy way of trading. I’m not fond of indicators either. They lag and they’re wrong 50% of the times.

Check out these threads, they may be useful to you:

Is It Feasible to Only Trade Candlestick Patterns/S&Rs?

I can testify that it is not only feasible it is being used all
the time with great effect. Take a look through the 3 threads

Okay I know they are a long read, mainly reserved for week-ends
but the results will be obvious.

Also this may sound as though I am now reversing my advice
but also try to see the charts with a couple of indicators such
as fibonacci (as S&R) & stochastics 8 3 3 on them.

The more you look at the charts with these indicators the less
you will need to use them, (yep you did read that correctly)
plus your TA will become more intuitive.

Thanks a lot folks - I’ve tried using Fibonacci before, but I always seem to have this problem of never knowing where to start drawing it and where to stop. In all honesty, though, I haven’t done much research on it, so this is probably due to lack of knowledge on my part.

With that said, I’m really pleased to see that, system-wise, I seem to be on the right track at least insofar as the basics are concerned.

In your experience, do you think it’s feasible to trade with an acceptable win:loss ratio using only candlestick patterns and S&Rs

yes it is more than feasable and in fact it is the only way i trade, but i wanted to talk about r:r

most people will quote r:r personally i don’t look as hard at it as some do but having said that. when you identify a key resitance level and you get a pricebar like a long wick pattern or what i call a pinbar telling you to go short. when you have this situation the resistance may be 30 pips away but your t/p would be the next significant support which may be 120 pips away which would give you a 1:4 risk reward. so you are able to limit your risk and maybe catch a huge move :slight_smile:

Better question

Is It [U][I][B]Profitable [/B][/I][/U]to Only Trade Candlestick Patterns/S&Rs?

Thats the same question. If it wasn’t profitable, it wouldnt be done. Three people have said that it is more than possible to do so…


I would like to add another thread to look at: “Keep It Simple Stupid…and make money” It didn’t get much play but some good trading analysis there. d.

Better question

Is It Profitable to Only Trade Candlestick Patterns/S&Rs?

better question…

can you trade a mechanical system with lagging indicators and no thinking and remain profitable in any market condition?

ill answer that no you can’t no matter what people tell you the markets are just to dynamic to fit into an if a= b format. would you find some success? yes a little but eventually it will fail.

the traders out there who succeed are the ones who are able to at bare minimum to break even in a sideways market but even better if they can profit in a sideways market coz honestly even a dummy can make money in a strong trend.

the thing is this you get alot of so called gurus who preach turn your computer into a cash register or whatever. they say set it and forget it or follow this arrow or that line to riches but that is not the truth

the truth is they are selling you a dream, a fantasy.

if you want to make it in this business you better be prepared to roll your sleaves up and get down and dirty.

trading involve analysis
it involves decisions
it involves thinking
it invloves being able to tune into the ebb and flow of the markets
I know of no better way to do that profitabl;y than to use support and resistance coupled with some very simple price action setups on the 4h or daily.

if you trade intraday be prepared to lose your money unless you have gained experience and are able to make the right kind of decisions quickly. otherwise congradulations you are going to join the other 95%

us s/r traders that use our brains will enjoy our place in the top 5% :smiley:

Well said! and I could not agree more…

support and resistance levels are the bread and butter of forex trading, candlesticks are the writing on the wall when it comes to trading, no matter what indicators your using they are only another variation of relaying the exact same information of what the candlesticks are…and thats price, once you can accurately read candles, understand price and how it reacts to support and resistance levels you are well on your way to being a successfull trader :slight_smile:

just my personal opinion…

I’ve recently started trading using S/R with only 1 other indicator just to confirm the trend. It’s worked wonders for me.