Doji, hammer or stars occur 70%+ on high/low of SP mini

[short&naked]

At 44:00 this educator states that that at highs and lows on a 15 minute mini SP chart, a doji, hammer or star will occur about 70% - 77% of the time.

He states that he is the first in the world to do this, but I do not understand the statistical significance of this. Of course these candle patterns occur at highs and lows since the market is turning at these points. But they also occur at other points in the market other than high/lows. A doji does not imply a market turning point.

Correct me if I'm wrong.

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[NoDoji]

At 44:00 this educator states that that at highs and lows on a 15 minute mini SP chart, a doji, hammer or star will occur about 70% - 77% of the time.

He states that he is the first in the world to do this, but I do not understand the statistical significance of this. Of course these candle patterns occur at highs and lows since the market is turning at these points. But they also occur at other points in the market other than high/lows. A doji does not imply a market turning point.

Correct me if I'm wrong.

You're right.

You can use almost anything at all as a framework for profitable trading as long as you do the research necessary to find the edge (context and money management) within the framework.

You can trade profitably using indicators, supply/demand lines, horizontal S/R, candlestick patterns, individual candlesticks, boxes, probably even phases of the moon.

One thing the uneducated trader does not need is a guru telling them how to use an individual candlestick formation to try and pick tops and bottoms on a 15-min chart. :eek:

 

[jj_]

Yet another salesman masquerading as guru who has found telling people how to trade is a more profitable, more consistent, more reliable and less stressful way to make money than to trade himself.

 

[Scaleout.Scalper]

I am a trader of candlesticks, but candlestick and candlestick patterns without context, in my most humble opinion, is a losing proposition.

 

[piezoe]

You're right.

You can use almost anything at all as a framework for profitable trading as long as you do the research necessary to find the edge (context and money management) within the framework.

You can trade profitably using indicators, supply/demand lines, horizontal S/R, candlestick patterns, individual candlesticks, boxes, probably even phases of the moon.

One thing the uneducated trader does not need is a guru telling them how to use an individual candlestick formation to try and pick tops and bottoms on a 15-min chart. :eek:

Well said. If hammers or stars appear 70% of the time the mini S&P is making a top or bottom, what percent of the time do the appear when it isn't making a top or a bottom?

 

[Scaleout.Scalper]

In my experience, a top or bottom is a turn, but not necessarily a doji or star, there are many types of turns, this can get even more "Manipulative" if you play with the timeframe as you notice the type of turn morphing into something different, yet equally effective.

 

[dbphoenix]

There is also the niggling problem that if one changes the bar interval (from 5m to 60m to 15m to daily to weekly to whatever), the "doji" or "hammer" or whatever disappear.

What does this tell you about the value of dojis and hammers, etc.?

 

[NoVoodooHere]

^ So true

& a different but related twist, if the bar in question started and ended a hair sooner or later, the magic formation would not appear.

Seriously think about that with an open mind :eek: soooo arbitrary

 

[Scaleout.Scalper]

There is also the niggling problem that if one changes the bar interval (from 5m to 60m to 15m to daily to weekly to whatever), the "doji" or "hammer" or whatever disappear.

What does this tell you about the value of dojis and hammers, etc.?

I have a difference of opinion with you here and will try to explain myself as English is not my first language.

The importance in candlesticks is the turn itself and not the type of formation.

Whether the turn comes as a hammer or a doji or harami or a tweezer or piercing or engulfing is of minor significance, but what does matter is that they all fall in the category of turns, and this is why changing timeframes or bar intervals changes the candlestick perspective or type visual.

We trading probability and what makes some turns more attractive than others is the potential opportunity to use very small stops. For instance, a small doji or small harami turning up/down is not the same as a long legged doji or hammer with nice looking wick turning, because your stop placement is quite different. It's attractive to use turns that require a small price action based stop vs a larger price action based stop.

Bottomline, a hammer or engulfing pattern or tweezer turn is no more likely to offer a swing turn that holds vs other less used candlestick patterns but a small stop placement offers indisputable attraction in the category of risk management.

Hope I was able to express my point across corretly.

 

[jnbadger]

There is also the niggling problem that if one changes the bar interval (from 5m to 60m to 15m to daily to weekly to whatever), the "doji" or "hammer" or whatever disappear.

What does this tell you about the value of dojis and hammers, etc.?

I am still occasionally lured into changing the time frame on a chart to make it look good so I can satisfy my manual trading addiction once in a while. It's about a break even endeavor. This is why I'm automated.