“Maybe charts are not useful enough and one should switch to using some other more useful tool / medium, with crystal ball like qualities.”
Perhaps…
A Somewhat Perfect aspiring method perhaps.
True enough I have not specified time interval of candlestick chart to use, or an exact policy regarding number of entries and exits and stop loss size per candlestick etc. These are easy to customise based on preference, but the core idea is clear.
Most systems placed on forums are aspirational. Just look at the accompanying cherry picked screenshots, often with maybe 3 entries per 100+ candlesticks, which one would struggle to pick out, ignoring all the setups in the interim periods that also occurred and failed.
At least this aspiring method presents opportunities to access profits on most candlesticks.
A few methods posted on forum are complete and fool proof systems - eg. buy long when the chart price cross above a 00 price level, TP 10 pips, SL 10 pips, but do they make a profit?
If one looks at their favourite indicator based system on a candlestick chart, and sees how the indicators enable access to the profits available from the price movement between where the blue and red squares and circles would be. If the indicator based method does not complement this, in terms of accessing profit opportunities from the price movement after the blue and red squares and circles which signify Somewhat Perfect profit opportunities from there onwards, then why use that indicator/s at all.
Candlestick Chart Picture C
Candlestick Chart Picture C shows more could have, should have would have opportunities.
Most people who try to chart based live trade fail to make enough pips profit. This is due to –
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Having to cover the broker spread before a profit is possible.
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Not being able to know where the chart live/latest price will move to and when.
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Charts only show what has happened, and future price movement is yet to occur.
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Charts only show past price movement over time (line chart), or intervals (candlesticks, bars) of time. Quite random info.
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Needing to use a stop loss due to not being able to know where the chart live/latest price will move to and when, which results in losing trades, to prevent a big loss that can lead to a margin call or worse.
How many times does the stop loss get hit only for price to move where one had hoped.
So chart based live trading for enough pips profit overall is very difficult, and the odds are stacked against the trader, regardless of time interval of chart used.
So one has to admit that one doesn’t currently have a method that one - easily makes enough pips profit with, or easily makes as many pips profit with as one would like to.
If a continuous line chart was used instead of an interval based candlestick or bar chart, seeing what one could have, should have, would have done for gaining the most pips profit would be less clear.
The other thread started by me - “Candlestick Low and High Prices” in the “Candlesticks, Chart Patterns, and Price Action” section of this forum, contains related details and more candlestick chart picture examples, but is not focused on an actual trading method, which this thread is more so.
With these candlestick chart pictures on both threads showing what would be Somewhat Perfect profit opportunities from on that candlestick onwards, based on the profit enabling price movement that followed the blue and red squares and circles all the way to the next opposing direction and different colour square. Candlestick Low and High prices
This is not my thread.
To create a Somewhat Perfect system, what I have posted so far may or may not be of use in that moving forward.
Something completely different may evolve.
Somewhat Perfect as the focus and hopefully the fruit.
Reverse engineering Somewhat Perfect may be possible.
To enable guessing accurately enough often enough where the chart live/latest price will move to and when, to make at least enough pips profit consistently overall.
Or maybe a trading crystal ball will emerge.
If I understand you correctly, based on the posted charts and the inspirational aspirations, that a trader should go long on the low, take profit at the high and go short at the high and take profit at the low and simply repeat.
Is that correct?
KC
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Perhaps one can use ones own initiative, interpretation and imagination to decipher what may be appropriate.
I am not recommending anything to anyone.
I have pointed out what to me Somewhat Perfect opportunities looked like on a candlestick chart, afterwards.
Which logically may be a good starting point for trying to create a Good Enough - Somewhat Perfect method.
Gotcha. It’s all clear to me now.
The chart price only may reverse - before, at, or after, existing candlestick based -
Low price Support levels are reached,
High price Resistance levels are reached.
The chart price is always somewhere between two century / 00 levels.
The Candlestick Chart Pictures I have posted simply show what to me would have been a Somewhat Perfect way to have traded through the duration of those candlesticks based on the profit enabling price movement that followed.
Could have, should have, would have. Plenty of opportunity to get involved.
This to me is a logical and simple good foundation starting point for trying to build or reverse engineer a method that one can use to good enough effect in actual live price trading.
Somewhat perfect aspirations.
Perhaps enabling one to guess - accurately enough and often enough where the chart live price will move to and when, to enable making enough or more pips profit consistently overall.
The most preferable price to enter long on a candlestick always occurs at the Low price, which may become that candlesticks Low price upon candlestick close.
The most favourable price to enter short on a candlestick always occurs at the High price, which may become that candlesticks High price upon candlestick close.
But if one misses the Low or High price, one is still able to enter after the Low or High price. As long as a Stop Loss is not reached making a profit may be possible.
The price movement unfolded as it did in the Candlestick Chart Pictures I have posted. Fact.
It was possible to have traded in (or somewhat close to) the Somewhat Perfect way as highlighted in these Candlestick Chart Pictures by the blue and red squares and circles. Fact.
We haven’t yet seen you post a live trade. Fact.
I still don’t know what the “trigger” is to enter on a candle’s close. Fact.
Nobody said one had to enter on a candlestick close. One can enter if and where one wants / decides to, which may be on or then after a candlesticks present Low or High price (which may become the candlesticks final Low or High price when that candlestick closes).
As stated, it was possible to have traded in (or somewhat close to) the Somewhat Perfect way as highlighted in these Candlestick Chart Pictures by the blue and red squares and circles. Ideas and suggestions about how to achieve this most fully and consistently are welcome in this discussion.
A good starting point is perhaps to observe price movement unfold on a blank candlestick chart, displaying big enough clear candlesticks such as in Candlestick Chart Picture A.
One can then identify the blue and red square and circle locations as they occur or don’t occur.
The smaller the time interval of chart used, the more candlesticks occur in a given period of time.
This thread is about striving towards reaching Somewhat Perfect trading performance, if possible. Whatever route/s taken and format/s involved in trying to and possibly getting there.
Everyone has a different perspective.
What one person ridicules, dismisses or tries to belittle, perhaps through an impatient, frustrated, closed and none objective mindset, the next person may give high praise to, or identify something of worth in it, have an aha moment, and come up with something worthwhile - Somewhat Perfect.
Metaphorically, turning a piece of coal into a polished diamond. We have a piece of coal.
I started watching this thread when it started because of the title. Then I could not stop checking in on it from time to time. You know: like somebody cannot really turn away from looking at a train wreck in progress or a burning building.
But I actually see, surprise of surprises, what the OP is trying to get at.
Here’s the problem as I am sure you are all aware:
No doubt the trades indicated on the example given would really be a pretty good or a “perfect” way to trade if you just stopped and reversed at the close in the direction indicated by the blocks. Problem: you are looking at the chart with hindsight. So the statement “it was possible to have traded” is invalid simply because you could not have known at the time that your current bar was to be the correct bar on which to stop and reverse at the close. It could have been or it could have been the next or the next and so on and so forth.
But (to the OP): you obviously have an enquiring mind and an idea in your head. Have you ever looked at an indicator called Parabolic SAR??? If not: take a look. Maybe a fresh pair of eyes could bring something to the table. You never know. Some of us spent years trying to tweak its parameters and improve its reliability and performance but to no avail. It lags and it whipsaws you badly in a range bound market. But the concept is not too dissimilar to what you are trying to investigate or create here. As I say: you never know i.e. fresh pair of eyes.
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The PSAR (~0.008 - 0.2) added to a Renko (~10) Chart can work wonders…
EURUSD Long Term Chart (PSAR Settings included)
Have been running a simple PSAR Trailing Stop cBot on this for months…
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Hey @objectively, I hope I understand most of what you are trying to achieve with this strategy build.
First of all the longer the TF the better the result should be. ie: 1H min - D1 max is were I’d be aiming.
I applied a tweaked version of the Parabolic SAR using your system and backtested an automated strategy based on “per candle”. Overall it works with tight risk management in place ie: R:R 1:3.
Generally the strategy will have price either move straight to a TP or whipsaw to the SL so the R:R formula will come into play. You may win ~6 out of 10 plays (tested on the D1 TF) which a 1:3 RR (or greater) will return a profit. (Below EURUSD D1 Chart EUR-Purple / USD-Blue)
There is an indicator in existence that uses a similar strategy on each candle, I don’t know the name of it, I believe I saw it on the MQL5 site. It will have numbers situated under each candle which I think indicated the probability of the next candle’s direction… which takes me to Heiken Ashi Candles.
This is another possibility you can research. These Candles (not an Indicator) use the value of HLOC/4 to give the value of the start of the next candle. check the HK Candles out…
Hope this might help, Cheers.
That is very interesting.
I have never looked at a Renko chart to be honest.
Very interesting indeed.
And a fine example of having a new pair of eyes taking a fresh look at an old problem and finding a new solution.
Thanks for posting.
Who knows. Maybe with some encouragement and a mind devoid of preconceived ideas the OP does indeed stumble across something new.
I guess: never forget that people thought the earth was flat!!! LOL!!! Then again: anybody heard of The Flat Earth Society??? LOL!!!
Regards,
Dale.
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I’m still trying to figure out any one thing that @objectively was getting at…
Got here searching for heiken ashi posts.
In my opinion, and for me, any chart based trading method that requires the addition of indicators to a chart, is not of any use and is therefore useless.
Candlestick Chart Picture D
Candlestick Chart Picture D above shows more could have, should have would have trade opportunities.
It shows the best places to have entered or stop and reverse entered to have gained up to the maximum of available pips profit that became available from live price movement during these candlesticks.
Anyone should be able to easily - recognize this and identify these (what have occurred in the distant or near past) for themselves on a candlestick chart.
Applying this to live price trading and guessing/predicting live price movement accurately enough and often enough to make enough pips profit overall is possible.
In my opinion, a successful live price trader is able to consistently make enough pips profit overall, with the minimum of effort time and difficulty, while limiting risk with an appropriate stop loss.