Candlesticks?

Simple. On a 5-minute chart a 5sma seems to hold the price quite well on trends. Since I've been using it I find I stay in trades longer. I used to cut myself off much too quick. Now on those days like Wednesday when QLGC for example runs up 1.35 I don't exit until the 5sma is breached. I was able to pull over a point out of that move where before when I used 1-minute candles I'd been out long ago.
 
I actually use a 4 MA on the ES and, with that (given the right conditions, it is usually good for a point or more.

However, it generally works well except for false signals, which is why I am on a quest for a more efficient MA that adapts to noise better than an SMA.

I use the 2 minute chart to trade from and take other signals from the 5 minute chart where appropriate. The one minute chart is worthless to me.

aphie
 
The only real problem with a 5-minute chart of course is in fast-moving markets. One candle can span 50,60 cents or more. Then where do you place your stops? I usually place my inital stop just below the 3rd candle's low, but not if it's a 50-cent risk. I suppose you could use an arbitarty fibo retracement level of that long candle, say 50%.

Also: if you get in after that long candle, you risk missing a great deal of the move.

Trading plans are always a work in progress, aren't they? :)
 
Originally posted by davez
I was surprised by Bones comment that candles are not good for short term trading. If I see a hanging man or shooting star after a rally in a 5 minute chart, I've found it to be a good indicator of a reversal. To be a little safer, then waiting for a stochastics and/or RSI high in a 1 minute chart, makes a short entry that much less risky.

Obviously a 5 minute candle pattern shouldn't be the basis for a multi-day long trade, but if the candle timeframe matches your trading duration timeframe, I've found intra-day candles to be useful.

Anyone else agree or disagree?
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Candle patterns are absolutely useful. Morning/evening stars and engulfing are the 2 most-reliable patterns I see. The piercing, belthold and harami much less so.
 
I never got into Fibos too much -- probably because I never really understood the concept. I understand they have relationships throughout the universe and nature, but it seems like the harmonics that drive an index are more powerful than the fibos -- and I just don't understand how they are to be used correctly without precise mathematics, which is something I could not really trade real-time.

I'm smart when I think slow, but I get stupid real-time.

aphie
 
I'm not a big fan of fibos either. In fact there are so many which one do you use? 38-50-63 are the most popular but that leaves too many pivot points.

Good old support and resitance points seem to work as well as anything. If a stock breaks a previous support low I'm gone. The hell with the fibonaccis and any other indicator.
 
You guys say that you can get reliable reads on complex multiple candle patterns on 1 and 2 minute charts? No way, no how on a consistent basis for 3, 4, or 5 candle continuation or reversal patterns when we're talking 1 and 2 minute charts, boys. Dojis and hammers, sure, but certainly not a Rising or Falling Three Methods.
 
I use daily candles on a two month span to find my setups. I then look at 5 min. on a two to five day span to get a feel for support and resistance. I then drop down to one min. candles to enter my trades. After I'm in, I go back to 5 min. to monitor my positions. Needless to say, I can't trade without candles.
 
Originally posted by bone
You guys say that you can get reliable reads on complex multiple candle patterns on 1 and 2 minute charts? No way, no how on a consistent basis for 3, 4, or 5 candle continuation or reversal patterns when we're talking 1 and 2 minute charts, boys. Dojis and hammers, sure, but certainly not a Rising or Falling Three Methods.
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1 and 2 minute no way. 5-minute yes.
 
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