First of all, don't make the mistake of getting mixed up about with the terms of candlestick chart with candlestick patterns because most traders that use candlestick charts do not use candlestick patterns. In fact, I once did two surveys on this many years ago amongst a TradeStation user group and a Qcharts user group (+1400 voters)...on average about 62% of the traders that use candlestick charts did not use Japanese Candlestick patterns as part of their trade methodology. I've also done other quick surveys in random free chat rooms and it's also in the +60% range.
As to the issue about price noise. Every chart interval has noise and all chart intervals will change in their noise level as volatility changes or as supply/demand changes from one trading day to the next trading day.
Simply, if a trader has problems with the price noise level on a particular chart interval...that's a trader that doesn't have the ability to recognize the noise until after the fact instead of as it is occuring. There as several old threads here at ET about how to recognize price noise as it is occurring instead of long after the fact. It could also be a trader that doesn't have discipline to ignore trades in price noise as identified as such as it is occurring.
Also, via other surveys, our reaction skills change as the chart interval is lowered and things are happening much faster. Most traders cannot cope with such, feel stressed and get lost in the forrest sort'uv speak in comparison to higher chart intervals. This also happens on line charts and bar charts. Therefore, it's not an isolated issue involving candlestick charts nor Japanese Candlestick patterns.
Further, as noted by someone in this thread, the reliability of candlesticks increases as long as you don't use the stuff by itself because all by itself it's not reliable. Also, I've done statistical analysis on most candlestick patterns (reliablility is low) and discover that many individual patterns have their own sub-groups. The reliability changes dramatically within these sub-groups. For example, not merged with any other method, one particular Bullish White Hammer pattern has only a 31% reliablity all by itself while another type of Bullish White Hammer pattern has a 48% reliability. I've discussed these particular types of patterns in an old thread here at ET that was started by another ET member (don't remember the link but if you dig deep...you'll find it).
Also, as noted in another old thread here at ET started by someone else...change the trade management (all that stuff after entry) and the reliability levels also changes.
However, getting back to the point made by Fleming_Snopes fraudulent application when not using something as it was originally designed...it's only human nature for a trader or any other profession (e.g. airplane designer) to try to improve on the original. For example, that's like saying anyone using today's new computers is fraudulent because we no longer use those old Altair 8800 pc computers.
http://www.computerhope.com/issues/ch000984.htm
http://en.wikipedia.org/wiki/Altair_8800
http://www.computerhope.com/jargon/a/altair.htm
Yeah, sure, some make changes to better improve the marketing or sales of something for profit. That's what data vendors do (e.g. eSignal, CQG, Bloomberg et cetera) by telling you about all the bells & whistles you get when we use their service and most (not all) of that stuff is used much differently or advertised then it was originally designed.
Heck, even data vendors change their data start times or close times of exchanges or particular trading instruments that's different from the original data they get directly from the exchanges. For example, QCharts folks insist that their CME data has a closing time 4:00pm est on the regular session chart instead of 4:15pm est. Thus, if you're a trader of Emini ES or Emini NQ and you're using the regular session chart...your data stops at 4:00pm est. That's not fraudulent unless they make an effort to convince us that's the actual close time of the CME.
Mark
As to the issue about price noise. Every chart interval has noise and all chart intervals will change in their noise level as volatility changes or as supply/demand changes from one trading day to the next trading day.
Simply, if a trader has problems with the price noise level on a particular chart interval...that's a trader that doesn't have the ability to recognize the noise until after the fact instead of as it is occuring. There as several old threads here at ET about how to recognize price noise as it is occurring instead of long after the fact. It could also be a trader that doesn't have discipline to ignore trades in price noise as identified as such as it is occurring.
Also, via other surveys, our reaction skills change as the chart interval is lowered and things are happening much faster. Most traders cannot cope with such, feel stressed and get lost in the forrest sort'uv speak in comparison to higher chart intervals. This also happens on line charts and bar charts. Therefore, it's not an isolated issue involving candlestick charts nor Japanese Candlestick patterns.
Further, as noted by someone in this thread, the reliability of candlesticks increases as long as you don't use the stuff by itself because all by itself it's not reliable. Also, I've done statistical analysis on most candlestick patterns (reliablility is low) and discover that many individual patterns have their own sub-groups. The reliability changes dramatically within these sub-groups. For example, not merged with any other method, one particular Bullish White Hammer pattern has only a 31% reliablity all by itself while another type of Bullish White Hammer pattern has a 48% reliability. I've discussed these particular types of patterns in an old thread here at ET that was started by another ET member (don't remember the link but if you dig deep...you'll find it).
Also, as noted in another old thread here at ET started by someone else...change the trade management (all that stuff after entry) and the reliability levels also changes.
However, getting back to the point made by Fleming_Snopes fraudulent application when not using something as it was originally designed...it's only human nature for a trader or any other profession (e.g. airplane designer) to try to improve on the original. For example, that's like saying anyone using today's new computers is fraudulent because we no longer use those old Altair 8800 pc computers.
http://www.computerhope.com/issues/ch000984.htm
http://en.wikipedia.org/wiki/Altair_8800
http://www.computerhope.com/jargon/a/altair.htm
Yeah, sure, some make changes to better improve the marketing or sales of something for profit. That's what data vendors do (e.g. eSignal, CQG, Bloomberg et cetera) by telling you about all the bells & whistles you get when we use their service and most (not all) of that stuff is used much differently or advertised then it was originally designed.
Heck, even data vendors change their data start times or close times of exchanges or particular trading instruments that's different from the original data they get directly from the exchanges. For example, QCharts folks insist that their CME data has a closing time 4:00pm est on the regular session chart instead of 4:15pm est. Thus, if you're a trader of Emini ES or Emini NQ and you're using the regular session chart...your data stops at 4:00pm est. That's not fraudulent unless they make an effort to convince us that's the actual close time of the CME.
Mark
