Candlestick Reversal Patterns

Originally posted by bone
I guess I'm more than a little perplexed by the number of traders using one and two-minute bars/candles, and thinking that they can divine some sort of meaningful market action out of them...

Personally, I would think that a trader is better off using a longer timeframe like five-minute bars or candles and tape-reading the order flow.
More...

Hi Bone,

Note: My reference is to the Eminis.

I know a lot of traders using candlesticks via the 1min charts or lesser (TICK charts) because they are scalping.

Further...traders using a higher time frame are usually looking for a lot of points per trade position.

Thus, it's possible all those traders your perplexed by...

they are using the shorter time frames in an attempt to capture a few pieces of a point here and there while hoping to catch a bigger trend to make the day stand out from other trading days.

Now...if you know traders using a shorter time frame in hopes of catching points...these are traders that often have difficulty in managing their stops or leaving too much profits on the table because of all the noise.

I have trade setups in which I'm only looking to capture a few pieces of a point...such require a smaller chart time frame...

and I have other trade setups in which I'm looking to capture a lot of points...such require a higher chart time frame.

Therefore...I think its key for the trader to use the appropriate chart interval to correlate with the profit goal.

Simply...I agree that a trader is better off using a higher chart interval but only if it correlates with his/her profit goal of POINTS. Just the same...those using smaller chart intervals should not be attempting to capture points because the trades become much more difficult to manage with a goal as such.

In addition (I've discussed this before in someones Journal thread)...when using higher time frames...such requires the appropriate stop. For example, using 1 point stops on 30min charts is not a very good strategy. Just the same...using a 5 point stop on TICK charts is not a good strategy.

P.S. Japanese candlestick analysis on any time frame works...yearly, monthly, weekly, daily, minute charts, TICK charts. However, they should be used with another form of TA for confirmation.

NihabaAshi
 
Longer time frames not only capture larger profits, but they capture larger losses also. Not quite like many folks like to believe, ie., a large reward requires a large drawdown. We are, after all, not trading someone's black box method.

Combining larger losses with the gross under-capitalization of many Emini traders relegates them to the shortest time frames. A trader opening an acct with 2K to trade the ES cannot make very many mistakes before a temporary or permanent ceasefire has to be called.
 
I must be doing this wrong, because I trade 10,000 futures contracts per day using five-minute candles. Seldom have overnight positions. In and out of the market like a mechanic.
 
Originally posted by bone
I must be doing this wrong, because I trade 10,000 futures contracts per day using five-minute candles. Seldom have overnight positions. In and out of the market like a mechanic.
More...
Yes bone, you are trading too many contracts and using the wrong time frame and you should be holding more overnight. I would suggest you stop working on the market like a mechanic and try to be more artful. Perhaps wearing a beret while you trade will help.
 
Originally posted by bone
I must be doing this wrong, because I trade 10,000 futures contracts per day using five-minute candles. Seldom have overnight positions. In and out of the market like a mechanic.
More...

Bone,

If it works for you and your making consistent profits...it ain't broke.

Thus, there's nothing wrong to fix.

Keep up the good trading and more power to you.

NihabaAshi
 
Mostly Eurex; about 1,000 - 2,000 CBOT A/C/E 10s and 5s per day on average. Will trade A/C/E MUCH MORE when they decide to stop splitting up the liquidity and go electronic all the way. Fuckin idiots at the Board. So glad I'm not on the floor any more. Good riddens. Go condo the sooner the better.
 
You must log in or register to reply here.
Back
Top