Daily Candlestick Triggers

[MrPaul]

	Quote:	walterw
	Mr Paul : can you add on the next charts you post the S&R levels you are taking into acct... (horizontal lines of pivots, mp levels, etc) that could show the entire trio... S&R, Candle and Volume... cheers Walter.

Good Idea Walter, I'll do that from now on...

[brownsfan019]

If you guys are going to get serious about candlestick trading, you need to read Steve Nison's books. Just start there. He has the best books on candlesticks hands down.

Idea for MrPaul and others looking/trading with candles and volume - if you like the combo, simply use Volume Based Charts instead of time based charts. You will find:

• Time based charts will NOT allow you to participate in fast moving markets as the candles can become VERY skewed.
• Do you normally stare at your watch while trading? If not, time based charts have a fundamental flaw.
• Why take up screen space with a chart that has candles and volume separated, when it can be combined into one neatly presented chart?

Keep in mind guys, candlestick trading is my bread and butter. If you are new to this, make sure you study it first and get confident before placing real money on the line.

A few pointers:

• Decide if you are trading with the trend or against it. Candles can be used in both scenarios.
• If you trade against the trend, make sure you have a hard stop in place and honor that stop.
• On an intra-day basis, be 'flexible' with your candle patterns. In other words, do not sit and wait for the picture perfect hammer.

I'm sure that a simple volume based candlestick chart will not be 'enough' for some people reading this, so good luck with finding the right indicator(s) to use in conjuction with this. There's always going to be trades that the indicator(s) 'save' you from and others that prevent you from making money.

Once again, the key is consistency.

[walterw]

Brow : if you use volume based charts you are not able to measure the diference on volume from bar to bar.... time based will let you see on the same period what diferent volume you got on each bar... also as ( I am ) making a paralel study of vsa on all this cant switch to volume based bars... now what I supose you are looking to (maybe) is how the volume in each bar had diferent spreads (h-l) wich could tell you what was the volume performance on price action... wich is beyond this thread an I think we want to keep it on Mr Paul candle stick /volume stuff here.... Brow I encourage you to start a thread on what you are doing, I think you got good valuable information to input, we are a growing comunity, all aproaches are very usefull indeed and we are all somehow interacting and coming to what individually fits best on its trading plan... cheers Walter.

[brownsfan019]

	Quote:	walterw
	Brow : if you use volume based charts you are not able to measure the diference on volume from bar to bar.... time based will let you see on the same period what diferent volume you got on each bar.

Walter - I see how the immediate reaction is that you will not be able to see large volume surges. Allow me to explain how the volume based bars do in fact 'show' you the volume surges - when candles are printing quickly, that in turn means volume is surging. When candles are taking a while to print, you 'see' that volume is just not there.

I think I mentioned this before here, but volume based charts were by far the one thing that took my trading to a high level. I was using time based charts and while it was decent, slightly adjusting the chart to reflect volume and not time, took my trading to the next level.

I understand that most traders want a purely mechanical way of trading, but in my experience that is very difficult to do. You have to be able to visually look at a chart and make a snap decision. I have no idea how some guys here are able to do that with indicators galore on their screens, along with a couple charts, etc. Paralysis by Analysis at it's best.

I would suggest MrPaul and others that are able to, also test your strategies on a volume based chart as well. The worst thing that happens is that you are unable to use Volume charts. The best thing that happens is that your trading catapults to the next level, as it did for me. I'll take that risk to reward setup all day!

[Robert2617]

Brownsfan, I am interested in what you are sharing with us. What volume per bar do you use or how do you determine what volume per bar to use? I'm very new to day-trading so I'm not set in my ways or locked into any particular style yet. I think your points are well stated and merit their own thread. This could be a huge breakthrough for me and others. Let the market tell you what it is going to do through volume candles. I like it.

Maybe SoulTrader or another mod will be so kind as to split this thread into a new topic so we don't hijack MrPaul's thread.

[Soultrader]

Tingull started a new thread on volume based candles so any topic related to it should be posted there for now. Very interesting topic brownsfan... I am definitely going to look into this myself. Just wondering if TS has this feature? I am actually a little familiar with this as Ive seen charts with fat candles and narrow candles (high volume vs low volume) so I am assuming it is the same.

[walterw]

Soul noup... volume bars brow is telling have the same volume each and every bar, the fat or smaller candle are equivolume candles, wich are time based candles wich take diferent size of volume per bar to take size of candle, wich happens to be I am about to introduce a new indicator that will do a sort of equivolume thing.... but still working on it, it will show the best of this two worlds (candle/volume).... wich finally also will intergrate some vsa concepts, but easier to read.... cheers Walter.

[MrPaul]

Today was quadruple expiration but Candles did light the way.

I did not trade today but these signals were good and could have been taken advantage of. The 15min chart today was the winner, the 5,10, and 30 were more foggy and didn't print clear signals like the 15 minute did.

Chart for March 16th 2007 15min ER2

An hour into the trading day price approached the "Previous days high"(black line) and formed a shooting star (red arrow) and was confirmed with a lower closing low (blue arrow) therefore displaying that demand for higher prices had dried up at a resistance level.

Price traded lower until the daily S1 was reached (black line), breached S1 trapping late sellers and forcing them to liquidate forming a hammer (red arrow) then confirming the hammer with a higher closing high (blue arrow).

Although it must be noted that momentum was weak after the hammer so smarter/quicker profit taking was warranted.

Thats all for the day hope everyone has a fun weekend

[Anonymous]

	Quote:	brownsfan019
	If you guys are going to get serious about candlestick trading, you need to read Steve Nison's books. Just start there. He has the best books on candlesticks hands down. Idea for MrPaul and others looking/trading with candles and volume - if you like the combo, simply use Volume Based Charts instead of time based charts. You will find: Time based charts will NOT allow you to participate in fast moving markets as the candles can become VERY skewed. Do you normally stare at your watch while trading? If not, time based charts have a fundamental flaw. Why take up screen space with a chart that has candles and volume separated, when it can be combined into one neatly presented chart? Keep in mind guys, candlestick trading is my bread and butter. If you are new to this, make sure you study it first and get confident before placing real money on the line. A few pointers: Decide if you are trading with the trend or against it. Candles can be used in both scenarios. If you trade against the trend, make sure you have a hard stop in place and honor that stop. On an intra-day basis, be 'flexible' with your candle patterns. In other words, do not sit and wait for the picture perfect hammer. I'm sure that a simple volume based candlestick chart will not be 'enough' for some people reading this, so good luck with finding the right indicator(s) to use in conjuction with this. There's always going to be trades that the indicator(s) 'save' you from and others that prevent you from making money. Once again, the key is consistency.

Just a couple of questions and observations:

1. BF, what do you think about Mark's approach? His knowledge of candle trading is far beyond what most sites have to offer? (Mark ((NA)) is a trader on another forum-I am sure you know of whom I speak)

2. Have you done any research into WRB's - Wide Range Bodies ?

* I like the idea of a chart picking up speed as activity picks up. But one needs to be able to compare volume in x period of vs volume in period x+1. Time is the fourth dimension. It is not a random concept.

Your body knows when to sleep and when to be hungry. Your body knows when to age and when to die. Time is elemental.

If you are looking at volume candles and you say the chart is speeding up, are you measuring distance X time ? So time plays a role in the perception of the chart being created. But with no way to make relative comparisons. Plus, the close of a period (1 min , 2 hour, or day) is the last agreed upon price for that TIME. Note a certain volume number. That is, the emini closes at 4:15 regardless of contracts traded. And since this the last price that buyers and sellers come together, certainly it is of some import.

[Anonymous]

Here's a nice example of a bullish white hammer pattern and an invalid hammer pattern (as per the pattern being discussed) .

Remember: a hammer is hammer line until and only if it completes thus transforming into a hammer pattern.