Trading using with candlesticks only and nothing else

Turveyd · May 23, 2016

If your refering to Japanese Candle stick patterns, then NO there rubbish, nothing in them statistically.

So, single Candle sticks are useless, it's about reading groups of candle for intraday, it's the slightly higher high, slightly higher low, ohhh Momo is shifting upwards, look for the next possible higher low then join it long.

profitlocker · May 23, 2016

ubermenschtrader said:
the catalyst would be the failure or acceptance of a price level. with volume showing participation or lack of it

That's the trigger. Catalyst would be something we believe will increase the odds that a trade will reach its target. Generally news based, but not always

optonly · May 23, 2016

ndtrader14a said:
Just wanted to hear what the experienced and/or successful traders here thought. Is it possible to trade solely based on candlesticks, and absolutely no other piece of information - no news, no volumes, and no sophisticated TA (maybe just absolute some basics like MAs, Oscillators only). This would be the most minimal form of price action trading, so to speak. Please share your experiences and observations.

Yes completely doable. But all traders are different. What works for one surely won't work for another. I only use rsi macd volume and 2smas on my analytical time frame 1hr. The actual trading time frame 5min. price action and volume focusing on specific candles, early in the day, long wicks or dojis only. Some work some don't. Trading only sticks, i trail the stop on on my trading time frame by each closing candle. Works for me.

ndtrader14a · May 23, 2016

Turveyd said:
If your refering to Japanese Candle stick patterns, then NO there rubbish, nothing in them statistically.

So, single Candle sticks are useless, it's about reading groups of candle for intraday, it's the slightly higher high, slightly higher low, ohhh Momo is shifting upwards, look for the next possible higher low then join it long.

No, not talking about any complicated Japanese candlestick patterns. I can't relate to those things. Simpler ones are probably OK. "hanging man" followed by 2 "hammers" etc.

ndtrader14a · May 23, 2016

profitlocker said:
That's the trigger. Catalyst would be something we believe will increase the odds that a trade will reach its target. Generally news based, but not always

I did in fact start off my studies by trying to demo trade on news. I sucked. You would have positive earning report and the stock would still move in the opposite direction. I don't think even proficiency in Fundamental Analysis would help here, since it is more of a question of how the markets interpret the results.

Counter point : if a news related move is in the offing, could one not potentially spot it in price action? For ex. by looking at the second by second bids and asks. If the move is indeed going to be a significant one, my hypothesis is that that would still leave the trader with a sufficiently large window in which to enter the trade, assuming of course the price action anomaly has been spotted in time. If the trader trades only a few well chosen scrips, spotting such anomalies and reacting to them appropriately becomes potentially easier, given that by virtue of having traded a small number of scrips repeatedly, the trader would have developed a good feel for them.

profitlocker · May 24, 2016

Right. You apply filters to price and ignore the news. React to the crowd reaction after the news is released. You need a solid trade plan because price is fast and volatile during these times

lcranston · May 24, 2016

ndtrader14a said:
No, not talking about any complicated Japanese candlestick patterns. I can't relate to those things. Simpler ones are probably OK. "hanging man" followed by 2 "hammers" etc.

Doesn't matter if they're simple or complex. Once you begin assigning names to these movements you're back to using indicators. The only difference is how you name them.

If you want to trade "pure" price action and you're long, your most important concern is whether or not price is making higher highs. If it was but it isn't any longer, you then have to determine whether price is just resting or it's setting up the conditions for a continuation or a reversal. Understanding trend will matter far more to you than what a particular candle or group of candles looks like.

lcranston · May 24, 2016

ndtrader14a said:
Counter point : if a news related move is in the offing, could one not potentially spot it in price action? For ex. by looking at the second by second bids and asks. If the move is indeed going to be a significant one, my hypothesis is that that would still leave the trader with a sufficiently large window in which to enter the trade, assuming of course the price action anomaly has been spotted in time. If the trader trades only a few well chosen scrips, spotting such anomalies and reacting to them appropriately becomes potentially easier, given that by virtue of having traded a small number of scrips repeatedly, the trader would have developed a good feel for them.

Yes, but it needn't be second by second. Important moves are telegraphed long before the actual announcement. AAPL, for example, broke its trend more than a week before its gap down.

K-Pia · May 24, 2016

With a naked chart and trained eyes you can see waves of Buyings & Sellings.
Usually it's cyclical and well rythmed. A bit like a sine wave.
Analyze the forces + some other stuffs (Volatility, ...),
And you can trade with a naked chart.
Remember it's recursive (Fractal).
Ratios are Gold too.

All need to do for being profitable,
Is to get in at the right time, at the right place.
Buy in a bull market after the seller pushed lower.
Sell in a bear market after the buyers pushed higher.
You can still get into the wrong place since wind is chaotic.
But if you get in with your friends, then you can exit break even.

wrbtrader · May 24, 2016

ndtrader14a said:
No, not talking about any complicated Japanese candlestick patterns. I can't relate to those things. Simpler ones are probably OK. "hanging man" followed by 2 "hammers" etc.

I do not recommend trading on "probably OK" considering Japanese Candlestick patterns are very easy to backtest.

Simply, just backtest them via whatever your trade method and trade management is to see their performance based upon "your" interpretation and not based upon the interpretation of someone else because two people trading the same pattern on the same trading instrument will have different trading results. Why ? There's that psychological variable and the trading experience variable that most people overlook until they have real money on the line.