Hi there,
I have just read the section on candlestick patterns and how specific patterns in specific orders can indicate a reversal. What time frame should I have my graph on i.e 1 minute, 5 minutes, 1 hour etc…? for these indicators to work best. As my 1 minute time frame may be telling me there is going to be a market reversal yet I switch to a half hour time frame and there looks like there is a strong trend still with no sign of changing…?
In my opinion below 01 hour may not give strong signals. For me lower time frames are just noisy. Cannot recognize candle reversal patterns correctly. Sometime you may right and sometimes you may wrong. I am also new here. So if we can practice our eyes in longer time frame that may be very useful to identify market behavior correctly.
I’m trading live about 6 month.
For my past 6 months experience been trading 5,15mins & 1hr feel very stressful need to monitor very 15mins.
End of the month still lose money.
Now decide to change to longer time fame.
See how the result for the coming months.
Will let u know.
If I am trading say in the 1 hour time frames then and the very last candle stick I see for example is in the opposite direction of the trend. Do i then need to sit and wait an hour for a larger second candle to form an then a further hour for a confirmation of a three white soldier formation e.g. Lets say the last candlestick is again in the opposite direction and therefore blown my three soldier reversal pattern out the water. I have just sat and watch the screen for three hours with no result…or can I be doing other productive analysis while i am waiting for one major pair to turn around…?
Basically when using 1 hour or longer timeframes do I have to wait for an hour or longer per candle?
Well if you’re trading purely off the candle patterns than yes, you’ve ‘wasted’ time into that chart. However you shouldn’t be staring at the chart for 3 hours to see if the pattern forms. If you’re trading a 3 candle pattern there’s no way you’ll trade until the 3 hours is up right? which means you really only have to check the chart once in 3 hours, or more likely once an hour.
In general the 1hr, 4hr and daily charts are the most commonly traded and monitored, and as such candle patterns that appear on those will be most solid.
However always remember. Candle patterns like pin bars and such are not some magical signal that appear. They are reflections of price. “Reversal” candles are more accurately known as “indecision” and “trend halts” imo. Thus you may be uncertain of where price will be in 5 minutes (if you are trading 5m candles) but you may still be convinced that the over trend is up on a daily bias. Ergo, conflicting charts on different time frames
it works for every time frame, if you look at lower time frame, it works for that time frame, when you change to higher time frame, you need to find it on the higher time frame.
It greatly depends on your analysis. A pattern doesn’t work better. It’s just a pattern. How you interpret that pattern to follow the movement of price is the variable.
You can trade any time frame with candlestick reversal patterns you just need to know how to trade them.
I trade 5, 10 and 15 minute price charts profitably and often trade reversal patterns. High/low techniques, double pushes, failed pushes etc.
I do have some videos on this stuff. Here we go.
There are many variables that go into formulating a answer for your question like the instrument, the time of day, even the market mood and its expectations for the day but generally speaking reversal patterns and candle signals and formations for that matter, statistically work better on higher timeframes - this would be at least 30 minutes but the higher you go, the more reliable they get.
That doesnt mean a head and shoulders or a morning star/evening star on H4 or Daily has 90% chances of succes each time - again,each setup has its own variables and needs to be analysed in its own individual context before commiting to a trade based on a technical signal.
Usually, when you have a few technical arguments (at least two) to enter a trade its good enough if fundamentals do not contradict it and if risk/reward is good.
What you have to remember is that candlestick analysis was originally developed using Daily charts and this is where it works best.
It works on the lower timeframes, but you have to be picky and only take the very best signals.
Also realise that different timeframes can show different trends. You may see a bullish trend on an hourly chart, but switch to Daily and you may see that the trend is clearly bearish.
Also remember that when you are trading the 5 minute charts and you see a good set up at the top of the hour, that is the time that traders using the hourly charts may be seeing a different signal in an opposite trend. They will probably be using larger stops and TP and so PA in the hourly chart can overpower PA in the 5 minute chart.
PA in the Daily chart can overpower PA in the hourly chart and so on.