@GamblersRuin: welcome to the forum
I understand completely what you are saying and i absolutely hate to seem in genuine at any point in time, as i pointed out a few posts ago i haven’t been able to trade this system to its potential and i myself have made a few mistakes this week, and have not been able to be at my computer so i’ve had to roughly calculate percentages on my iphone which obviously won’t be 100% accurate
That being said the first indecision candle in post 505 is valid :3 i double checked just now to be 100% sure as well, it could be a difference of brokers we have that have slightly differing prices but on my forex.com account it is valid
I am aware there have been a few times my calculations have been flawed and i have admitted and apologized for them, And the morning star is an interesting question, MOST traders would agree with you, in fact i would say like 99%
But that is not how i see it, typically stars happen in times of overall market indecision at the extremes of price, meaning at the high or low of a swing the current momentum stalls, and then reverses
to illustrate this point take a look at the three 4 hour candles before the first candle in the morning star formation, it is hard to tell exactly where price has moved and there are many long wicks and the bodies show little movement, then zoom in to the 1 hour, and the 15 minutes, it should be much much clearer then… You can see clearly that in the first half of the candles we are drawing direction from price is moving steadily up and makes higher highs and lower lows, but then you can see price begins slowing and then drops suddenly, and forms lower lows and lower highs, this is clear downward movement that isnt quite clear on the 4 hour chart sometimes, the way i deal with this is similar to the inside bars, i realize this type of question hasn’t come up yet so my example of how to determine direction for stars was kind of crappy as opposed to the inside bars, but it is very similiar
I hope this clears things up: Basicly when we see a potential star formation we know three things at first, these three facts are obvious and completely independent of all other candles around them, these facts are that the three candles can be defined as follows:
- A candle that is not an indecision candle (meaning the movement is not indecisive, the candle has definitive movement in one direction)
- A candle that signals indecision (long wicks, small bodies etc. the definition of an indecision candle)
- A candle that is not an indecision candle (meaning the movement is not indecisive, the candle has definitive movement in one direction) that shows movement COUNTER to the first candles movement
After these three things have been established within the three candles of the potential signal you can start looking to see if the movement of the first candle is of the trend or momentum in place, the way to do this is to see who has gained more ground in the past 4 candles INCLUDING the first candle in the potential star formation, either the bears or the bulls, to do this find the highest and lowest price in those 4 candles then compare those two prices to the close of the first candle in the potential star formation, If the close of the first candle of the potential star formation is farther from the highest price then the movement is downward and the candle must agree, if the close of the first candle of the potential star formation is farther from the lowest price then movement is upward and the candle must agree
I hope that makes sense :\ basicly average out the highest and lowest price in the 4 candle period and if the first candle in the potential star formation closes above the average, it has to be a bullish candle and would then form a morning star, and if the first candle in the potential star formation closes below the average, it has to be a bearish candle and would then form an evening star, the ideas behind this system is looking for areas in the market where price slows down and the bears and bulls power struggles the most, and from these points we can pick high probability entries, indecision candles are the literal interpretation of that, stars are slightly more advanced indecision patterns that happen over longer amounts of data, and inside bars show places where the market consolidates and is ready for potential breakout
I hope i was able to help clear things up, again i dont mean to be inconsistent :\