In this 5 minute chart we see the Starc bands on a roll.
That is, they drop steeply. >>>
By tymen1 at 2009-03-29
After entry, we delay our exit to get the maximum number of pips before we exit somewhere at the bottom.
It may take some green candle development before we see for sure that the downward trend has finished.
The first warning sign comes when we see the Starc bands (pink) move away slowly from the Bollinger bands. (blue).
Now lets have a look at a full Advanced level trade in detail, following the Starc bands right through.
I will find a completed recent example for use.
This will not be a live trade but will serve to explain what is going on.
Now I have recently had to update my Dealbook platform because of the latest updates added.
It still works well.
Please wait…
Here I have a first fully completed trade.
It is of EUR/USD on a 20 minute [U]main chart.[/U]
We are looking at an evening star pattern (highlighted) and this tells us to trade [U]short[/U] >>>
By tymen1 at 2009-03-29
[B]For the Advanced level, we now turn to the 5 minute chart.[/B] >>>
By tymen1 at 2009-03-29
The chart is self explanatory.
The first trading candle in both the main and 5 minute charts was at time 14.40 pm.
We are trading [U]short[/U], hence all our entries are short entries.
We [U]never [/U]trade long.
The entries on the 5 minute chart are shown at the upper Starc 0.7 line.
The exits are shown at the lower Starc band.
The [U]last exit was delayed [/U]as the trade went on a roller coaster ride and the pips were collected.
If you had entered on the mid Starc band, you would have got one more entry but the sum total of pips gained would have been less.
With 2 amounts, you can enter both amounts at the same time or enter the 2nd amount later and improve on the 1st amount.
[B][U]Important[/U][/B] - the entries on the Starc band are made and traded short [U]regardless [/U]of whether the starc bands are going up, level, or down.
I have not counted the pips on this trade, but as you can see with the roller coaster ride at the end, it was an excellent trade.
I will now show another Advanced level trade using the Starc bands.
This time it will be a little more complex. 
[B]In this main chart of USD/CHF we see a 35 minute timeframe [/B] >>>
By tymen1 at 2009-03-30
We look to trade the evening star on the Bollinger band (highlighted).
This pattern tells us to trade [U]short[/U].
As you can see, it made a nice journey down, but with retracements in between.
[B]And here we have the relevant 5 minute chart with the Starc bands >>>
[/B]
By tymen1 at 2009-03-30
Lets examine this chart.
The entry candle started at 18.30 pm, given by the black vertical line.
We do not enter immediately, but wait until the price action reaches the upper 0.7 line where you can choose to enter [U]short [/U]2 amounts immediately, or enter [U]short [/U]only 1 amount and improve on this entry by entering the 2nd amount later.
This short entry is shown by E1.
The price action goes up first, giving us a drawdown.
Then, later the price action goes down hitting the lower Starc band and we exit at X1.
The area marked “fear region” may well be just that.
Caution may be exercised here by some traders because the price action and the Starc bands are going up - the wrong way.
Since we are always trading short in this trade, this area may possibly be avoided, although there is really no danger in trading it.
[U]It appears to be dangerous, but it is not.[/U]
The 2nd entry is marked.
Although it does not hit the 0.7 line, it is certainly a great deal better than the mid starc band.
The exit follows shortly at X2.
The pip score…(spread is 3 pips).
E1-X1 = 12-3 = 9 pips.
E2-X2 = 20-3 = 17 pips.
[B]Total = 26 pips.[/B]
To compare fairly with the Basic/Intermediate levels, we look at 2 amounts, therefore, we have [B]52 pips.[/B]
[B]This trade is accomplished in one and a half hours.[/B]
[B]I have 2 trades to look at today.[/B]
Still looking at the Advanced level.
Lets spot the first one, a 25 minute chart of the Cable (GBP/USD).
This trade started 2 and a half hours ago and is still ongoing as I type this post.
We find an interesting combination of evening star and short engulfing pattern >>>
By tymen1 at 2009-03-31
The entry point for short trading is shown.
We will not enter immediately but rather get the correct entry from the Starc bands.
Note the huge retracement upwards - lets see what is going on with the Starc bands!! 
Here is the 5 minute chart of the Cable showing the Starc bands.
The trade is happening as I post here >>>
By tymen1 at 2009-03-31
The entry point corresponding with the [U]main chart[/U] is shown with the black vertical line.
The green candle at this point is small and since we are going short, we have to enter at the upper 0.7 line or better.
This [U]short entry [/U]is accomplished with 1 or 2 amounts at the next green candle (E1 shown).
With 1 amount entered, it is possible to [U]improve on the entry [/U]with the 2nd amount entered above the upper Starc band.
In any case, the exit is shown at the bottom Starc band.
A travel of 29 pips minus 3 for spread = [B]26 pips.[/B]
[B]This done in less than half an hour!![/B]
[B]Now a 2nd [U]short entry [/U]at E2 is shown - lets see what happens.[/B]
[B]Here is the rest of the Starc band in the 5 minute chart[/B] >>>
By tymen1 at 2009-03-31
Oh dear!! :eek: :eek:
The Starc band goes up as it follows the price action up.
There is a drawdown of 19 pips at the highest red candle wick.
But as I showed earlier with an all pink chart, the Starc bands move in cycles.
Also, the candlestick pattern tells us that we can expect a main trend short,
so it comes as no surprise that the very next candle touches the lower Starc band signalling an exit.
The travel here is not very great - 10 pips.
Take away 3 for spread, we have[B] 7 pips.[/B]
The total trade so far is 26+7 = [B]33 pips[/B].
[B]However, as I type, more is underway - lets look at what is going on!! [/B]
Here we have a great development to the 25 minute main chart.
A very large travel downwards (short) has occurred.
After this, we can confidently expect the trade to be ended. >>>
By tymen1 at 2009-03-31
[B]Again, lets see if we can trade further in the 5 minute starc band chart[/B].
There is a lovely short trade here.
E2 is shown again, then we get entry E3 >>>
By tymen1 at 2009-03-31
E3 makes for an easy short entry on the upper 0.7 line.
The exit is seen with a red candle touching the lower starc band, but at the same time, we can see the bands going down.
So we are on a roll, and we wait to exit later.
We do not see the end of the roll until a green candle appears.
Its lower wick is shorter than the previous red candle.
Time to exit and we get a travel of 31 pips.
3 for spread gives [B]28 pips [/B]gained.
Now we have a sum total of [B]61 pips.[/B]
This gained in just over [B]2 hours.[/B]
[B]Now this is a conservative estimate.
With 2 amounts, you can improve on the entries and get better figures.[/B]
[B]Now on to my second trade for the day.[/B]
We have an evening star on a 20 minute chart of POUND/YEN (GBP/JPY). >>>
By tymen1 at 2009-03-31
The short entry candle is shown and so is the PCI stop loss (I have not forgotten stop losses).
The PCI is place 3 pips above the high of the star.
We notice a powerful retrace of the price action.
[B]But a trade is not finished until we either hit our profit target or hit our stop loss!![/B]
And we see here that despite the strong retraces, the PCI was never hit.
Lets look now at the 5 minute starc band chart…
In this 5 minute chart we have interesting developments >>>
By tymen1 at 2009-03-31
The entry line (vertical black) corresponds with the entry line on the main chart.
Now we are [U]trading short.[/U]
The first 5 minute candle is very small.
We wait for the second candle which easily reaches the upper 0.7 line.
The entry is shown here - E1.
The entry is thus made, but with 2 amounts, an improvement on this entry would have easily been possible.
I am going to be conservative and assume an entry only on the 0.7 upper line.
There is very little drawdown as we wait for an exit on the lower starc band.
[B]Our PCI stop loss is never under any threat!! [/B]
As the price action starts to drop towards the lower starc band (red candle), the starc bands go down sharply too.
We expect to be on a roll downwards.
This does not eventuate, and a conservative exit, X1, is shown on a green candle.
Entry E2, does not reach the upper 0.7 starc band as hoped.
In our clumsiness, we settle for an entry at the mid starc band.
The starc bands then drop down on a roll and our excitement build up as we expect many pips!! 
It takes a while to register in our head that the roll is over and we settle for an exit at the close of a green candle as shown.
[B]I have tried to observe practical, novice type thinking in the above trade.[/B]
Lets see what the profits were…
The spread is a shocking 6 pips!! 
E1-X1 = 25 -6 = 19 pips.
E2-X2 = 32-6 = 26 pips.
[B]Total profit = 45 pips.[/B]
If you had traded astutely, you would easily have done better!!
[B]This trade was accomplished in just over 2 hours.[/B]
Thats it for me for this evening (your day!!)
I have a busy day tomorrow.
If you add the two trades together that I have posted, you will have at least 100 pips.
[B]Not bad for 4 hours work!![/B]
[B]Further more, your PCI stop loss was never under any threat in either of the trades!![/B]
More is to come.
[B]Questions and posts welcomed.[/B]
Tymen, thanks for finding me lost on the vacated UMS thread
I couldn’t understand why both of those threads died out… I knew you wouldn’t leave us hanging.
Perhaps as a suggestion for those like me who are new here, if you could put a link at the end of the original candlestick thread (now locked) to lead to this one, maybe more will find their way
I have been very active in bringing myself up to speed in the world of forex over the last 4 weeks, and I can’t say enough how grateful I am to yourself and everyone else here at babypips… it has made my time very useful and enjoyable thus far.
I look forward to further development of this method, as I have found it to be very comfortable to my own style. Looking at patterns just ‘makes sense’ and makes one feel like they are actually doing the work, versus simply waiting on indicators. So again, thanks!
I wanted to share something with this thread since it has been such a gift so far… I feel compelled to give back where I can. I know yourself and others have recommended Steve Nison’s books on candlesticks. In doing a random internet search, I came across someone’s page (not mine!) that apparently has one of his books in its entirety in .pdf format.
JAPANESE CANDLESTICK CHARTING TECHNIQUES:
A Contemporary Guide to the Ancient Investment Techniques of the Far East
I was not sure if I should post this in potential violation of forum rules, but I have found it to be very helpful and thought I would share. If it is inappropriate, I will delete this post.
If it is okay, I encourage all to save a copy for yourself, and read at your leisure.
Enjoy!
~floss
for candle patterns
which time frame is most powerful
daily , 4 hour chart?
Is there a time frame where has the least amount of false signals?
There is only one guide to the timeframes.
The longer the timeframe, the more reliable the signal.
Do not seek patterns on 1 or 5 minute timeframes.
The long timeframes eg daily, means you have to wait a long time to get a pattern.
Hey thanks very much Flossnhoss!!!
Looks like I see candlestick patterns everywhere! Even in the street!!, lol
I’m sure it’ll help me A LOT as well as to other people around here.
Have a nice day!