You dismissed two extremely important matters in trading by price and that is support and resistance. When it comes down to it, if you can spot those points on a chart, you can make low-risk bets regardless of whether you're using candlesticks or whatever.
candlestick or chart pattern work?
- Thread starter s002
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Yes and No!!
Yes, you can risk a small amount going long near a Support point ( LIVE buyers, not historic ), but big boys are aware that retail attempt that, so a tight SL will likely be hit by a blip the wrong direction, so then you have to use a bigger SL then your R:R falls down.
Also, when a S/R point breaks, likely get a fast move, so even with a tight SL, you'll likely get slipped for twice the hit
Trading is NEVER EVER EVER Easy!
I did, I track dozen chart all the way back to 2008(year-year, month-month base), try to see a pattern with Candle+RSI/Stochastic, SMA or others etc, I couldn't its not consistent, so I thought I'm doing something wrong since a lot people swear by candle/pattern(I mainly focus on doji, reverse hammer, shooting star, engulfing etc just try to see its consistent). support/resist seem more consistent.
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Due to the arbitory nature of time, ie there is nothing special about a 1min candle close or a 1day, pretty much random.
So nothing wrong, you've just rightly came to the conclusion, its pretty much all BS to sell books and create losers.
You should then trust your own personal results and just realize that you're not trading like those other people. Just as important, they should trust their results instead of worrying about your application of Japanese Candlestick patterns.
Stick with what you know and that seems to be support/resistance but just don't use it all by itself. Many threads at this forum that say s/r works and many threads at this forum that say s/r does not work.
What you're saying is especially true about the intraday. What I'm speaking on has more to do with bigger time frames. Besides, in my case, I wait to see some good action instead of blindly entering a position at S&R levels.Yes and No!!
Yes, you can risk a small amount going long near a Support point ( LIVE buyers, not historic ), but big boys are aware that retail attempt that, so a tight SL will likely be hit by a blip the wrong direction, so then you have to use a bigger SL then your R:R falls down.
Also, when a S/R point breaks, likely get a fast move, so even with a tight SL, you'll likely get slipped for twice the hit
Trading is NEVER EVER EVER Easy!
Bigger SL's, haven't got to worry about Spikes on D1 charts really!
Intraday S/R is pretty much useless, it's all about momentum, S/R most of the time, just gets trampled, maybe on slow days you'll get away with it, but still likely due to chance than anything else.
Well, I wouldn't say useless in the absolute sense but much different than a longer time frame. LOL
What I've noticed about intraday S&R is that you have to trade them within the trend. For instance, my rule is that I never buy support in a downtrend and I never sell resistance in an uptrend. However, buying support in an uptrend and selling resistance in a downtrend has created some great trades for me.
Its how to do it, the buy supporters lose generally, so flip it, then when it breaks out which is most of the time your on the right side ofcourse, and the fast move to slap retail is great for you, gets you to a nice fast profit.
And it generally wont move against you fast, slipping your SL like theres.
Opposite of what stupid masses, is the way to go always.