Why were neither of these red hammers reversals? (pic)

[ljyoung]

Quote from IronFist:

I just got the Steve Nison DVDs from eBay. I got both sets: Strategies for Profiting with Japanese Candlesticks and How To Be A Samurai Trader.

I'm sure I'll post a new thread when I have questions about something I heard on them.

Best of luck, Ironfist. The Japanese are no slouches when it comes to trading well. I have learned a lot from reading Nison's works.

As a f/u on the "refresh" artifact what I did was to find a decent data feed ( I use DTNIQFeed - it's not perfect [it misses some trades and can be a little slow if you're a DOM jockey] but it is hard to beat for the cost). If you combine it with Quotetracker charting software you have got a pretty good package for $30-$40/month. Someone else told me about this combo and I know it is pretty widely used. eSIgnal, IMO, is a rip. There are higher end packages which can run $400-$500/month and supposedly the cream of the crop is a Bloomberg or Reuters terminal for $1500/month.

But getting back to candles, there is a candle aficionado (which I definitely am not) with a moniker NihabaAshi who has some interesting thoughts which you might find helpful.

Good trading,

lj

 

[slapshot]

Quote from IronFist:

Hammer formation after a significant downtrend, yet neither of them were followed by a reversal.

(7/17/07 RMBS 1 min chart)

It's very simple - candles are nearly useless on 1 minute charts.

If you read any of the books on candles, i.e. Nison's book, he states clearly that they are really powerful on weekly & monthly charts, somewhat useful for daily and somewhat suspect intraday, with the smaller intervals being extremely unreliable.

 

[NihabaAshi]

Quote from slapshot:

It's very simple - candles are nearly useless on 1 minute charts.

If you read any of the books on candles, i.e. Nison's book, he states clearly that they are really powerful on weekly & monthly charts, somewhat useful for daily and somewhat suspect intraday, with the smaller intervals being extremely unreliable.

There is an obvious time when the 1min chart is extremely useful (discussed many times else where here at ET) for day trading via Japanes Candlestick analysis.

However, the RMBS chart does not represent one of those useful times to use the 1min chart for day trading purposes as I mention in a prior post in this thread about RMBS data issue via the 1min chart in that particular chart example he gave.

Mark

 

[brownsfan019]

Quote from slapshot:
If you read any of the books on candles, i.e. Nison's book, he states clearly that they are really powerful on weekly & monthly charts, somewhat useful for daily and somewhat suspect intraday, with the smaller intervals being extremely unreliable.

I've read all of Nison's works, have his DVD's and have attended a live seminar and he has NOT said that candles are 'extremely unreliable' on intraday charts. As a matter of fact, the live seminar was built around daytraders.

Not sure what Nison material you are referencing, but it's not accurate if you have discussed these things with Steve recently. Keep in mind that you may be referencing a book that is a few years old and is not necessarily completely accurate now.

As Mark said, a 1 minute chart on RMBS may not work for candle analysis; however a 1 minute chart on other stocks, futures, etc. could work just fine.