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Candlestick Trading

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princeplanet

Joined
19 May 2010
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I'm interested to know more. Sites like AussieBulls boast pretty good track records (too good to be true?). Can this stand alone strategy really deliver?
 
IMO No. Interpreting candlestick patterns is similar to interpreting VSA patterns in that the win rate is no better than random. However if you consider candlestick and VSA patterns within a larger context or market structure then you can improve the win rate considerably. Once you improve the odds of a winning trade then your trade management has a better chance of creating a positive edge.

I use candlestick reversal patterns as they provide an entry trigger and a logical stop loss. However I wait for a reversal pattern to form at the end of a corrective swing against a larger time frame trend. I also use candlestick continuation patterns and failed reversal patterns to get into strong impulsive swings.

A knowledge of candlestick patterns (and/or VSA) may help you understand and help you anticipate what might happen next. This is only the first step in formulating a trading plan.
 
Hi
I am also having a play with the candlestick charting ,
and have purchased books "Japanese candlestick charting techniques" and "beyond candlesticks" both written by Steve Nison.
So far I have made money on my investments (maybe beginners luck) but have also left a lot on the table meaning I have a lot to learn:
The books are easy to read and understand

Floater
 
To be fair, VSA can be used without candlestick patterns. I.e. you don't need to know what "Bullish engulfing superman butterfly cyclone"* is to analyse volume and track trends. Although there seems to be a push to apply VSA to candlestick patterns though. This is fine but it depends how you want to look at things.

To me, candlestick patterns are an advanced topic as a way of visualizing supply and demand. I think it's a far greater task to understand supply and demand on a more fundamental level before tackling patterns. I am not sure if people will agree. They might think patterns are an easier shortcut instead of doing an in depth and lengthy study of how markets move.

*I may have made that up.
 
Valued said:
"Bullish engulfing superman butterfly cyclone"*
Click to expand...

I was trading that pattern in Linc Energy all last year.*

I use them as my default chart type as I think they show the price action the most graphically - especially on a weekly chart.

* I made that up.
 
tinhat said:
I was trading that pattern in Linc Energy all last year.*

I use them as my default chart type as I think they show the price action the most graphically - especially on a weekly chart.

* I made that up.
Click to expand...

You clearly missed the Bearish Singapore pattern. That's kind of an important one.
 
tinhat said:
I was trading that pattern in Linc Energy all last year.*

I use them as my default chart type as I think they show the price action the most graphically - especially on a weekly chart.

* I made that up.
Click to expand...

Hi tinhat,

I did not know you traded patterns!!
 
tech/a said:
"Bullish engulfing superman butterfly cyclone"
Click to expand...
Just saw this ---classic!!!
Click to expand...

Classic indeed
What a pity that Thomas Bulkowski hasn't yet analysed it long enough to provide some net success rates, like he does for his "Top Ten" at http://thepatternsite.com/CandlePerformers.html

Personally, I use s few selected patterns as auxiliary "warning flags" when a chart reaches a support or resistance zone where I intend to buy or take profit. Generally, I trade within channels or "envelopes"; but if I recognise one of the more reliable patterns - especially particular Dojis or Haramis - then I'm inclined NOT to wait for a break outside the channel, but take profit or at least part profit early.
Works for me, and does the trick on a wide range of periods, from 10 minutes to days or even weeks.
 
All but all of the robots/Strategies are going to fail some day.
You need to trust only on your self!!!
 
kevinric said:
All but all of the robots/Strategies are going to fail some day.
You need to trust only on your self!!!
Click to expand...

If you can out perform robots and strategies and your as capable of handling failure as well as the bots and strategies.

Because you will fail!
 
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