Candlesticks, Gives money?

Hi Niha,

Thanks for your attention.

I use SuperChart, not TradeStation.

I have a lot of software, but the SuperChart is very nice.

Years ago I use the Real Time FutureSource and then SuperChart, via Satellite to trade S&P500 future (the big) during some years together with a friends on a full time basis.

Due to my English I think is better to read the main idea in this article:


http://www.activetradermag.com/special/cyberbierovic0602.htm

Salut
 
Quote from NihabaAshi:

Such cannot be coded.

NihabaAshi
More...

Niha, great post.

I agree with you. After two years of backtesting I learnt backtesting was great for seeing if your theory is roughly right or roughly wrong ... but there are WAY too many combinations of possibilities in a chart (not all codable) for it to indicate how one can maximise profits (or screw up psychologically) in real life.
 
Quote from nzbryant:

Niha, great post.

I agree with you. After two years of backtesting I learnt backtesting was great for seeing if your theory is roughly right or roughly wrong ... but there are WAY too many combinations of possibilities in a chart (not all codable) for it to indicate how one can maximise profits (or screw up psychologically) in real life.
More...

Thanks nzbryant,

Most backtesters of candlestick patterns made the following mistakes...

* Backtested the generic pattern only
and not the price action that leads to the generic pattern.
* Failed to recognize there are sub-groups of each pattern and within the sub-groups are a few reliable setups that stand apart from the majority of unreliable setups.
* Failed to take into account the enormous impact that key econ reports, regular schedule market events et cetera
* Attempted to use candlesticks to define the price action instead of vice versa.
* Incorrectly identified (tested) candlestick patterns...engulfing, hammers and tweezers are the most misinterpreted patterns.
* Failed to realize that there are two signals...pattern signal and entry signal.
They only test the pattern signal.

Simply, put aside the computer codes and learn candlestick patterns manually while also learning price action itself with more emphasis on price action itself.

I think we all at one point in time got seduced by how fast a computer can spit out a trade signal...

Easy trading and computers are never wrong...right ???

Therefore, if the computer can't give you anything reliable...

Sit down and do it the old fashion way (hard work)...start printing out charts and reviewing past charts...

Then write a well-designed trading plan with emphasis on the trade management (stuff that occurs after the entry signal) and you'll be able to do where most have failed.

NihabaAshi
 
Quote from NihabaAshi:


Then write a well-designed trading plan with emphasis on the trade management (stuff that occurs after the entry signal) and you'll be able to do where most have failed.

NihabaAshi
More...

Yep.

For what it is worth to newbies, I'll note that I've gone back to bars, as I like to see the left to right continuation of price (open tick to close tick) like reading a book. Candles can seem like they are one point in time.
 
Wanna use candlestick???

Read Reminiscence of a Stock Operator.

Partridge...

Ring a Bell???

Ahhhh.... it's not a big deal... Candlesticks have 0 validity on predicting future price... but can add value to trading entry, again, minimal value towards "predicting future 'trends' " by "itself".
 
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