Candle patterns filtering

Its a very good idea to lose the candlesticks at some point of reasoning.

Rice is nice but not for monitoring to make money.

Most money is made by monitoring the formation of bars.
 
Quote from sunnyskies:

Neither Nison nor other book authors tell you HOW to trade candlesticks.
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:eek: :confused: :confused: :eek:


Sorry but I have to ask, because my morbid curiosity has gotten the better of me (again :p).

I confess that I know nothing about candlesticks as a trading tool. I've never studied them and I've long suspected, perhaps incorrectly, that they don't work.

But if the authors don't tell you how to trade with them, what's the freakin' point!!?? :confused:
 
Personally, and it is only an opinion of one trader which is me, I think Candlesticks are useless. The only value they serve is indcating that a change in perception/value may occur. I would like to here from one trader who is profitable trading candlestick patterns. Its all just a different way of looking at price or more precisely (viewing it on a chart in fancy colors). Focus on value. If you buy a candle, can you sell it to someone else for more than you paid for it.
 
Quote from sweetlettuce:

Okay. Let's test this out. Take a look at this daily chart of the ES. Tell me what is about to happen.
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Set bracket!!!! The market then takes you in for a run.
Too bad you don't watch volume as a leading indicator of price.
 
Here is the volume I watch.

What I am asking is....make the prediction about tommorrow based on the candlestick formation in the above post. I would guess most think tommorrow will be a down day but I do not use candlesticks...what does this formation mean?
 

Attachments

It seems to me if you blend candlestick patterns into one you come up with the same basic patterns - indicating either volatility compressing or that heavy buying/selling came in. That's what I use them for and for their superior visuality. I don't trade off the pattern per se.
 
Quote from sweetlettuce:

Okay. Let's test this out. Take a look at this daily chart of the ES. Tell me what is about to happen.
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That chart attachement of yours on ES...

http://www.elitetrader.com/vb/attachment.php?s=&postid=764305

I don't see a valid candlestick pattern that occurred today or yesterday to prompt your question.

Last candlestick pattern I see via looking at SPX.X daily chart instead of ES daily chart (more info from SPX.X about the price action)...

Occured back on May 6th 2005...a short signal.

By the way...who is your data provider ???

Some of those intervals are incorrect via comparing them to the CME website data and FutureSource data.

For example...take a closer look at your interval for today June 7th Tuesday...your chart shows ES basically had a range of 1-2 points.

Hopefully this isn't the reason why candlesticks are unreliable for you :cool:

Quote from sweetlettuce:

Personally, and it is only an opinion of one trader which is me, I think Candlesticks are useless. The only value they serve is indcating that a change in perception/value may occur...
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There's a contradiction here...

First you say they are useless then you start describing one particular aspect where they are of value.

By the way...that value description you gave may be all that's needed from candlesticks.

Can you get that same value from something else...Yep.

Quote from sweetlettuce:

...What I am asking is....make the prediction about tommorrow based on the candlestick formation in the above post. I would guess most think tommorrow will be a down day but I do not use candlesticks...what does this formation mean?
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Your already using candlesticks incorrectly.

You are thinking along the lines of using them as a prediction tool.

Lets pretend there was a valid candlestick pattern in your chart...

Lets pretend its a bearish pattern.

That doesn't mean you Short anywhere tomorrow and expect price to drop so you can exit for a profit.

What it should mean to you is that your Bearish at this moment in time and tomorrow you'll be looking for anything bearish (confirmation) to tell you its time to Short at a particular moment regardless if it involves candlesticks or not.

Me personally, pretending the close of ES today gave a bearish candlestick pattern...

I would like to see ES increase in price tomorrow in comparison to today's close (doesn't matter when)...

Preferrably anywhere around the 1205.00 price area based on the price action before the pretend bearish candlestick pattern.

Then...only then...if a short signal appears...I would get short.

However, just the same...it doesn't imply I would ignore a Long signal if it appeared.

Can you tell the difference between predicting (you get stuck in one scenario) and managing a candlestick trade signal or any other trade signal via the scenario I explained above eventhough its a bearish candlestick pattern (pretending its one) ???

Think outside the box

By the way...I just gave a generic scenario (one example out of many) of how to filter out candlestick patterns based on the thread starters question...

Quote from GiaMa:

...What indicator or method do you think is more efficient to filter signals you obtain using japanese candlesticks?

Thanks!
GiaMa
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NihabaAshi
 
Thanks again to all of you.
I am a "silent" reader :)

Thanks to daveb351 for the link. I'll go to visit that site.

I believe that NihabaAshi wrote a correct thing that usually is forgot, not only for candles but for trading in general: "better to manage the risk than try to predict the move".


Quote from NihabaAshi:

...
the difference between predicting (you get stuck in one scenario) and managing a candlestick trade signal or any other trade signal via the scenario....
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