The last red candle at the bottom of the above referenced chart looks like a pivot point low at the bottom of the chart where it looks like it pierced the lower bollinger band. Was that the last drop or did it drop any farther than into a demand/support level, before heading back skyward?
The candlesticks are a great tool of that there is no doubt?
Several years ago I bumped into an article that only briefly mentioned the use of Starc Bands in Conjunction with the Bollinger Bands as an overlay. After search the internet in vain, I came up empty handed until I once again bumped into your articles on there combined usuage of both these bands together. Mr. Tymen1, thank you for putting it all together.
Can one of you expand more on this topic for us newbies.
How do you determine supply and demand?
If the price has gone up for a while and then an evening star appears, is it good enough to say that the demand is waning?
Are there any other criteria to decide?
If the price does indeed drop, then I think it is safe to say that the sellers have taken control ie the bears have taken control over the bulls.
With the appearance of an evening star, or any other candlestick pattern we are actually looking at an emotion chart, and since we understand emotions, we can predict the most likely future action.
Emotions such as greed, fear, indecision are at work.
The best way for me to explain this it to refer you to the following hyperlink…
Click on the attached files and go to (2) - Iron filings drawing for candlesticks.
The morning star pattern to the left which pierces the lower parallel bband, represents a large imbalance between supply and demand. look how the market shoots up rapidly from that pivot point low. That is in my opinion large institutional buying order flow coming in at that point. The question also is why the market dropped to that pivot point low to begin with. What was the reason for that shooting star which pierced the upper band to the left before the market dropped. The reason perhaps is there was no one else to sell to i.e. there were no more buyers at that point. At that point, Supply exceed Demand and the market had to fall.
That red candle which the arrow is pointing to ,looks like a pullback to support or demand. That point would have probably been a great place to buy at representing a low risk high probability trade.
I agree with Tymen1 that the emotions with out a doubt in so far as the retail public is concerned play a huge part in the decisions they/we make in a trading. All of us are victums of that, and that is why we have to have a firm set of rules mechanical or other wise which we cannot violate when we get ready to pull the trigger. The mechanical rules set forth by Mr. Tymen1 when using the Starc bands over lay in conjunction with the BBands is spot on.
On the institutional side of the equation which are the banks, large money management funds, hedgefunds and the like, they also have a set of rules. And I believe those rules are applied without any emotion whatsoever. For example, I doubt that you will ever see the above chasing a market. There buy and sell orders I am sure are placed well in advance of the public’s orders.
I think the candlestick patterns gives very large clues as to who is moving the market. It certainly cannot be the public when you see markets shoot up or down rapidly. No one after all could possibly have that kind of buying power to bring a market up quickly or down so very quickly.
On the pictures so vividly displayed on Mr. Tymen1’s charts show the turns in the market. I believe what we are seeing are the big players, playing their hands out. It would be my guess that if you drew pivot points including the median points on what Mr. Tymen1’s excellent charts, the turns in the Starc and overlayed BBands would pretty much line up very very close.
Hallo Tymen and Everyone
I started reading your thread from the begining and now things looks clearer to me. but it allthough takes time to put things correctly to your brain. So while i’m very hury to learn I have a question. If U have a perfect evening star on a mid BB do U take this pattern as a good signal? And if so how many of these pattern’s succeed.
Blaiserboy: When a market shoots up like a rocket skyward, is there more demand or supply at that point? When a market starts falling like the proverbial lead ballon, does supply exceed demand or does demand exceed supply?
When a market blasts up skyward whos orders are those. Does the retail public have that kind of buying power or do the large institutions which include banks, money management funds, and hedgers? Who has that kind of buying power to do that? Is it the retail public or is it the large institutions which are always way ahead of the curve.
Whos Bid and Ask orders are those which ignite that kind of movement or movements up or down in the market?
I think you want to complex your view of the market place… and establish certain things which may not be relevant.
The fact is… if I submit a puny order and there are no offers at that price. the trade will occur at the next highest where there is an offer… and if that happens to be 100 pips above my market order… the transaction will occur at that higher price and the transaction will show as a rising price… regardless of big guys or little guys…
In brief experience working on the floor of the TSE I have seen the little guys move the market with small orders in a thinly traded time… and without regard to the MM who may have been out for a break and without regard to the ‘box’ for that stock.
Forex is traded over the counter, the ‘big’ guys are not always in the market.
The system that Tymen is portraying will work whether or not there are big guys in the market or not… he is teaching us to interpret price action according to certain patterns regardless of volume and market players at the time.
The patterns work as he is using them in his personal trading and that can be loner term or fast scalps. he seems to dabble in more than one time frame with his methods…
We are fortunate to have a long time skilled trader willing to impart his techniques.
Thank you again for your compliments [B]Blaiserboy[/B]
You are absolutely correct in what you say regarding the bids and asks.
If we do happen to see a giant candle form rapidly, be it green or red, we can always check the time it occurs and see if it matches up with a news release.
If it does, we can be quite sure that the news release is the cause of such an enormous candle in a very short space of time.
I have beeen a victim of this at times in my 5 minute charts - correct candle direction, correct entry timing, correct BB direction, correct everything.
Then suddenly a news report and the price action goes the wrong way and does so at lightning speed.
Before you know it, your PCI stop loss is hit.
Certainly not a good signal.
It could go either way.
Is the mid BB going down?
Even if this is the case, and the trade does succeed, the distance to the lower BB is limited.
When trading from the upper BB with an evening star, you are putting the odds in your favour, providing the mid BB is showing downward tendancies and the upper BB is not expanding.
I have covered this ground before on the correct use of the Bollinger bands.
hi everyone, its my first post here for a very easy question for you guys.
i don’t know but i couldn’t fully relate on this part in the 1st strategy when reading “THE ULTIMATE CANDLE STICK METHOD”
here is the screenshot of it, i know its very basic but still i couldn’t relate in which part would i be able identify it,
i know instructions is in the bottom of this picture, but what i’m trying to understand is the picture itself coz when i see it i couln’t really relate much on the picture compared in using it in my broker
does it have any relevance in the flatform/broker that we are using ?
i’m using fxsolution as my broker, and doing demo account for now trying to grasp education here before starting next month as my goal. i also use a starcband analysis tool there but still i could relate much in which part i would be able to identify where to start/exit entries.?
[I]
I know this is very basic and still i’m trying to understand each of this by backreading all of the information posted.
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[B]but anyway the rest of the information in the first guide was clear for me, its just this picture i needed to have some clarification :)[/B]
Jdash, the picture you are referring to was used as part of the Extreme_Starc_Band indicator which has since been removed from the system so we no longer need this reference; however earlier in this thread Tymen did post the relevant information pertaining to current system.
I would suggest you read through the Joy of Candlestick Trading (Tymen suggests page 140 forward (Post # 1420)) and then read through this entire thread. Take notes as it will be most helpful to answer your questions.
The Joy of Candlestick Trading � a Learning Experience is found here -------301 Moved Permanently
Understanding and clarification will come with repeated applications of the principles… a person has to do a replay for many hours to grasp each of the nuances…
This business is very ‘homework’ oriented, we have to study the price bars and the indicators to see everything.
