do candle sticks really work?

Quote from humblepie:

Exactly. I haven't "proved" anything, nor did I make that claim--I only wanted to cast doubt on it for those with an open mind, and contribute to the original post.
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But how did you come to the conclusion that you wanted to cast doubt on candlesticks? Through your test, which is so flawed it is laughable. Here is a partial list of things your test failed to test for:

-Support and Resistance Levels

-Accurate definition of a trend ( 3 lower lows doesn't cut it)

-Risk Reward Ratio

-Entry method ( at the close, wait for a retracement, or wait for bullish confirmation)

-Volume Analysis

-Intermarket Analysis

-Gaps

-Money Management

-Too stringent of bullish engulfing definition

-Other technicals

So the only thing your test showed is that buying every bullish engulfing pattern is not profitable. In other words, you showed the candles by themselves are not a system. Congratulations, you showed what every book on candles tells the reader. Candle patterns should be a secondary reason for entering a trade, not a primary.

I still find it funny that you thought that taking a generic candle pattern definition and testing it would show a profit. Do you really think it is that easy?

I guess that is the beauty of ET. Someone, who stated they have not traded in 8 years, ran 1 test, can post whatever they want.
 
Quote from Trader273:

But how did you come to the conclusion that you wanted to cast doubt on candlesticks? Through your test, which is so flawed it is laughable. Here is a partial list of things your test failed to test for:

-Support and Resistance Levels

-Accurate definition of a trend ( 3 lower lows doesn't cut it)

-Risk Reward Ratio

-Entry method ( at the close, wait for a retracement, or wait for bullish confirmation)

-Volume Analysis

-Intermarket Analysis

-Gaps

-Money Management

-Too stringent of bullish engulfing definition

-Other technicals

So the only thing your test showed is that buying every bullish engulfing pattern is not profitable. In other words, you showed the candles by themselves are not a system. Congratulations, you showed what every book on candles tells the reader. Candle patterns should be a secondary reason for entering a trade, not a primary.

I still find it funny that you thought that taking a generic candle pattern definition and testing it would show a profit. Do you really think it is that easy?

I guess that is the beauty of ET. Someone, who stated they have not traded in 8 years, ran 1 test, can post whatever they want.
More...

This is getting silly. I didn't "come to the conclusion that I wanted to cast doubt on candlesticks", whatever that means. In fact, it was the opposite--I was hoping I would find that bullish engulfing patterns were a contributing factor to a trading decision, and my test made me doubt that. It seemed that they were making the same contribution as a roll of the dice.

Yes, average Joes can run one test and post the result--golly, if only the whole internet had a moderator to screen all postings, it would be such a better place! I did not mean to hurt your candles' feelings, I only wanted to share my own experience for people to interpret it as they see fit. I encourage you to question Bulkowski's methods as well, because he has a larger audience to misinform than I do, and he also appears to have ignored the criteria you mention above. Make sure you try the "argument from authority" approach with him. Whoever has more years under his belt wins!

You should continue trading in whatever way works for you, and I hope you continue to do well.
 
Candlesticks work perfectly, they show the high low open and close which is what they are supposed to do. Everything esle is up to the trader to decide.
 
The Hammer did work, :) although for only one day. :(
The bearish red body also worked. :D
Next candle buy signal, when RSI is below 30 and MACD is turning up, may be a long term signal. :cool:
 

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