There is more information in the candlestick chart than you will ever know.

[ansesfj]

Candlesticks have some merit. Afterall, they've been used for literally centuries, originating with Japanese rice traders. But therein lies the problem with them as well.

Candlesticks have been researched and analyzed out the ying-yang. If candlestick formations are the only tool in your toolbox, you will have a very difficult time over the long haul, although that statement is somewhat dependent on the type of trading (intraday, swing, position, buy and hold, etc) you do. Of course you can point to successful trades... So did the rice traders, and (obviously) some modern day traders as well.

My point is candlesticks are merely a tool. Nothing more. Check out Bulkowskis thepatternsite.com for individual candle (and multi-candle) probabilities. It might disrupt several of your biases. And of course, Steve Nison, the man, the marketeer, who brought candlesticks to the western world. Many candlestick gurus can be easily found. Unfortunately, regarding candlesticks, "guru" means marketer, which is not trading. Nothing new to see here, sorry, no grail, just a tool. But I wish good trading to you on your journey.

Thank you for your opinion.

Yes you are correct @tiddlywinks , I am using candlesticks as a tool in my trading together with my other tools that i have created and that is how i am able to pinpoint those profitable areas on a chart.

I know it is not easy to process it when you first hear about it, but how i am using the candlestick is totally different from how the inventors of candlestick charting use it. They group them into formations, I don't . Instead i read them individually.

when you read them individually, your chart becomes independent of the things that affect your trading ( news, predictions, past performances etc) and your focus is entirely on that very moment on.

 

[ansesfj]

Seems like your observations are based upon visual inspection. Yet, actual backtest numbers supporting those observations is what you want...follow by simulator trading results...that's what you want to do prior to real money trading.

It'll minimize too many common problems that plague us traders.

Regardless, everything eventually stops working and then needs adapting for current market conditions.

wrbtrader

When you read candlesticks individually, your chart will become independent of any market condition. That is what i noticed.
Back-testing - i have done that to many of my strategies in the past. . . but even with a positive back testing result , it does not guarantee future profits . . .that is why i don't believe in backtesting. Sorry , that was my experience, and I know that you may have done a lot of back testing that made positive results but still made losses in the real market conditions.


My point in making this post is to let other traders know that there is more to those candlesticks than we actually know and learning about it and studying it can really improve your trading results....like it has done to mine.

 

[wrbtrader]

When you read candlesticks individually, your chart will become independent of any market condition. That is what i noticed.
Back-testing - i have done that to many of my strategies in the past. . . but even with a positive back testing result , it does not guarantee future profits . . .that is why i don't believe in backtesting. Sorry , that was my experience, and I know that you may have done a lot of back testing that made positive results but still made losses in the real market conditions.

My point in making this post is to let other traders know that there is more to those candlesticks than we actually know and learning about it and studying it can really improve your trading results....like it has done to mine.

You don't need a guarantee of future profits...

Instead, you need to know the probability (positive expectancy) of your trade method so that you can determine if you should take that trade when your trade signal (custom Japanese Candlestick pattern) appears.

Backtesting is just part of the equation...the other part is the simulator trading results to support your observations even if you don't believe in the backtesting.

Heck, even if you simulate traded successfully, it does not guarantee real money trading profits. Reality, if you can't simulate trade your pattern successfully via a simulator...don't bother trading with real money on the line.

Yeah, I strongly agree, Japanese Candlestick patterns can be helpful but just like anything else...its a tool of the trader. That means the deciding factor for success or failure is still the trader...not the pattern.

I use Japanese Candlestick Analysis but primarily as warning signs to give me early heads up that a profitable trade needs to be exited early or warning signs that a losing trade needs to be dumped prior to the stop loss being hit...minimizing the loss.

wrbtrader

 

[ansesfj]

You don't need a guarantee of future profits...

Instead, you need to know the probability (positive expectancy) of your trade method so that you can determine if you should take that trade when your trade signal (custom Japanese Candlestick pattern) appears.

Backtesting is just part of the equation...the other part is the simulator trading results to support your observations even if you don't believe in the backtesting.

Heck, even if you simulate traded successfully, it does not guarantee real money trading profits. Reality, if you can't simulate trade your pattern successfully via a simulator...don't bother trading with real money on the line.

Yeah, I strongly agree, Japanese Candlestick patterns can be helpful but just like anything else...its a tool of the trader. That means the deciding factor for success or failure is still the trader...not the pattern.

I use Japanese Candlestick Analysis but primarily as warning signs to give me early heads up that a profitable trade needs to be exited early or warning signs that a losing trade needs to be dumped prior to the stop loss being hit...minimizing the loss.

wrbtrader

if you don't need a guarantee for future profits ....then why do you backtest to prove your strategy is working?
why do you need to backtest at all? What is the purpose of the backtest if it is not to prove that your strategy can make money?

Using candlesticks they way you just described is what i have been saying all along.....we tend to keep using it the way it was taught on books or by resources available on the internet......but what i am trying to bring to the table is how you can use it better to improve your results instead of just a warning sign to minimize loss.

This is a new way that is working for me , and i am trying to share it here to open your minds to a new opportunity that no one has tapped into yet.

Would you like to show us how your candlestick technique has helped you in your trades? I am showing you mine and it is quite clear on those pictures how many pips i am raking in with my candlestick technique.

I have been using this technique for quite a while now...it has not failed me yet , instead it has only improved in performance.

 

[tiddlywinks]

This is a new way that is working for me , and i am trying to share it here to open your minds to a new opportunity that no one has tapped into yet.

On your charts your "custom" candlesticks have 4 data points... OHLC. Period.
This is no different than non-custom, default candlesticks.

YOU (and only you) have a "new opportunity that no one has tapped into yet".
Using the same 4 price variables.
What is wrong with this picture?
Are you a vendor?

 

[ansesfj]

On your charts your "custom" candlesticks have 4 data points... OHLC. Period.
This is no different than non-custom, default candlesticks.

YOU (and only you) have a "new opportunity that no one has tapped into yet".
Using the same 4 price variables.
What is wrong with this picture?
Are you a vendor?

those 4 numbers tell a lot of story . . . there is more in there than what the eyes can see. If you train your eyes to see beyond the charts and the 4 numbers , you can then achieve good results.

and btw , why are you trying to fight a good thing??.......try and absorb this new information and and use it to your advantage. I have been reading alot of posts on this forum...many are just good old boring stuff....no one is coming up with any new ideas that really works....

All i read is traders trying to figure out the same old methods that never made them any money...still trying to make it work ,when they know very well it has not worked since the day it was invented.

To be better in this field, you need to be open to new ideas....and embrace them....especially if you can see it working.

 

[eurusdzn]

Isnt bar by bar interpretation Brooksville?

 

[wrbtrader]

if you don't need a guarantee for future profits ....then why do you backtest to prove your strategy is working?
why do you need to backtest at all? What is the purpose of the backtest if it is not to prove that your strategy can make money?

Using candlesticks they way you just described is what i have been saying all along.....we tend to keep using it the way it was taught on books or by resources available on the internet......but what i am trying to bring to the table is how you can use it better to improve your results instead of just a warning sign to minimize loss.

This is a new way that is working for me , and i am trying to share it here to open your minds to a new opportunity that no one has tapped into yet.

Would you like to show us how your candlestick technique has helped you in your trades? I am showing you mine and it is quite clear on those pictures how many pips i am raking in with my candlestick technique.

You only need to know the probability of success. Lets pretend pattern you're using has a 78% success rate in a particular type of market condition called condition A. Yet, it only has a 42% success rate in another type of market condition called condition B.

The exact same pattern but in different types of market conditions.

If you know the probability from the backtest results...you'll then know when to trade the pattern when it appears and know when to "ignore" the same pattern when it appears.

My point, markets are not the same every trading day even though we get the same trade signal every trading day. One day maybe it appears 3 times. The next day it appears 15 times...another day the trade signal appears 7 times. The difference is due to the markets not being the same from one trading day to the next trading day eventhough its the same exact pattern.

Those different market conditions are due to different market context for the day. One day the markets are reacting to geopolitical situation. Another day the market is reacting to other key markets, another day the markets are reacting to a regular schedule economic event and so on. That market context changes the conditions in which the pattern appears within.

Simply, if you know the strength and weakness of your pattern...you'll then know when to use it and when to ignore it.

Regardless, you don't believe in backtesting...that then puts more weight on your simulator trading results. If its not successful, don't bother traversing into real money trading until you're profitably trading that pattern via a simulator.

As for the sharing anything specific about your pattern, I didn't realize you had shared anything specific about your pattern. I thought you were just recommending to take a closer look at Japanese Candlestick Analysis.

Last of all, I've already shared my interest in Japanese Candlestick Analysis via old threads here at the forum a long time ago and I don't remember the direct link...something to do with "Trading Hammers".

wrbtrader

 

[ansesfj]

You only need to know the probability of success. Lets pretend pattern you're using has a 78% success rate in a particular type of market condition called condition A. Yet, it only has a 42% success rate in another type of market condition called condition B.

The exact same pattern but in different types of market conditions.

If you know the probability from the backtest results...you'll then know when to trade the pattern when it appears and know when to "ignore" the same pattern when it appears.

My point, markets are not the same every trading day even though we get the same trade signal every trading day. One day maybe it appears 3 times. The next day it appears 15 times...another day the trade signal appears 7 times. The difference is due to the markets not being the same from one trading day to the next trading day eventhough its the same exact pattern.

Those different market conditions are due to different market context for the day. One day the markets are reacting to geopolitical situation. Another day the market is reacting to other key markets, another day the markets are reacting to a regular schedule economic event and so on. That market context changes the conditions in which the pattern appears within.

Simply, if you know the strength and weakness of your pattern...you'll then know when to use it and when to ignore it.

Regardless, you don't believe in backtesting...that then puts more weight on your simulator trading results. If its not successful, don't bother traversing into real money trading until you're profitably trading that pattern via a simulator.

As for the sharing anything specific about your pattern, I didn't realize you had shared anything specific about your pattern. I thought you were just recommending to take a closer look at Japanese Candlestick Analysis.

Last of all, I've already shared my interest in Japanese Candlestick Analysis via old threads here at the forum a long time ago and I don't remember the direct link...something to do with "Trading Hammers".

wrbtrader

You are still going on about market condition being the problem to how you trade.

I have just said that reading the candlestick individually frees your trades from any market condition. Your chart becomes independent because you are just reading the candlesticks as they come.

That is why you don't understand what i am talking about - because you are still concerned about different market conditions where in my case, that is not an issue at all.

And btw, i am confident about my strategy that i dont even need to test it on a simulator...i am already going live with it.....and those are the results.

I have many more that you can check into if you want.....

 

[wrbtrader]

You are still going on about market condition being the problem to how you trade.

I have just said that reading the candlestick individually frees your trades from any market condition. Your chart becomes independent because you are just reading the candlesticks as they come.

That is why you don't understand what i am talking about - because you are still concerned about different market conditions where in my case is not an issue.

Regardless to our differences...

My initial reply about backtesting and codes was due to your placement of your thread in the "Strategy Development" section.

Topics include NinjaScript, ThinkScript, EasyLanguage, and Excel scripting, as well as backtesting and optimization, etc.

wrbtrader