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Old 03-17-2007, 02:37 AM
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Re: [Volume Based Candles] and how to profit

Here ia a Candle Pattern Recognition TradeStation RadarScreen Indicator.

Good ol Rumpled one.

[LegacyColorValue = true]; {_SMAA_Dynamic_CPR - CandleStick Pattern Recognition } {Programmer: Avery T. Horton, Jr. aka TheRumpledOne} { http://www.stockcharts.com/education/ChartAnalysis/CandlestickDictionary.htm } { http://www.litwick.com/glossary.html } Inputs: iDecimals(2), iOpen(open), iHigh(high), iLow(low), iClose(close); inputs: Length( 1 ), Factor( 2 ), Percent( 5 ) ; variables: o3WhiteSoldiers( 0 ), o3BlackCrows( 0 ) ; variables: oBullishHarami( 0 ), oBearishHarami( 0 ) ; variables: oPiercingLine( 0 ), oDarkCloud( 0 ) ; variables: oMorningStar( 0 ), oEveningStar( 0 ) ; variables: oMorningDojiStar( 0 ), oEveningDojiStar( 0 ) ; variables: xTriggerTime1(time), xTriggerTime2(time), xTriggerTime3(time), xPeriods(60), xInterval(0), sFirstPass(true), xMRO( 0 ), xIndMin( 0 ), xIndAvg( 0 ), xInd(0), tInd(""), FG1(white), BG1(black), fg2(white), bg2(black), fg3(white), bg3(black), fg4(white), bg4(black), vdummy(""); {commentary variables} variables: xcomm(0), oComm1( "" ), oComm2( "" ), oComm3( "" ), oComm4( "" ), oComm5( "" ), oComm6( "" ), oComm7( "" ), oComm8( "" ), oComm9( "" ), oComm10( "" ); {candle variables} variables: xOpen(0), xOpen1(0), xOpen2(0), xOpen3(0), xClose(0), xClose1(0), xClose2(0), xClose3(0), xHigh(0), xHigh1(0), xHigh2(0), xHigh3(0), xLow(0), xLow1(0), xLow2(0), xLow3(0), xTop(0), xTop1(0), xTop2(0), xTop3(0), xBottom(0), xBottom1(0), xBottom2(0), xBottom3(0), xMid(0), xMid1(0), xMid2(0), xMid3(0), xTopShadow(0), xTopShadow1(0), xTopShadow2(0), xTopShadow3(0), xBottomShadow(0), xBottomShadow1(0), xBottomShadow2(0), xBottomShadow3(0), xBodySize(0), xBodySize1(0), xBodySize2(0), xBodySize3(0), xBodyAvg(0), xBodyAvg1(0), xBodyAvg2(0), xBodyAvg3(0), t1DayPattern("DOJI"), t2DayPattern("DOJI"), t3DayPattern("DOJI"), sFound1Day(false), sFound2Day(false), sFound3Day(false), xcdummy(""); {first time through} if sFirstPass then begin sFirstPass = false; {bar test} If bartype = 4 then xInterval = 94 else If bartype = 3 then xInterval = 93 else If bartype = 2 then xInterval = 92 else If bartype = 1 then begin xInterval = BarInterval; end; { If bartype = 1 } end; {if sFirstPass} { INITIALIZE } tInd = ""; t1DayPattern = "" ; sFound1Day = false ; t2DayPattern = "" ; sFound2Day = false ; t3DayPattern = "" ; sFound3Day = false ; FG1 = WHITE; BG1 = BLACK; fg2 = WHITE; bg2 = BLACK; fg3 = WHITE; bg3 = BLACK; fg4 = WHITE; bg4 = BLACK; xOpen = iOpen; xOpen1 = xOpen[1]; xOpen2 = xOpen[2]; xOpen3 = xOpen[3]; xClose = iClose; xClose1 = xClose[1]; xClose2 = xClose[2]; xClose3 = xClose[3]; xHigh = iHigh; xHigh1 = xHigh[1]; xHigh2 = xHigh[2]; xHigh3 = xHigh[3]; xLow = iLow; xLow1 = xLow[1]; xLow2 = xLow[2]; xLow3 = xLow[3]; xTop = maxlist( xOpen , xClose ); xBottom = minlist( xOpen , xClose ); xMid = ( xHigh - xLow ) * 0.5 + xLow ; xTop1 = maxlist( xOpen1 , xClose1 ); xBottom1 = minlist( xOpen1 , xClose1 ); xMid1 = ( xHigh1 - xLow1 ) * 0.5 + xLow1 ; xTop2 = maxlist( xOpen2 , xClose2 ); xBottom2 = minlist( xOpen2 , xClose2 ); xMid2 = ( xHigh2 - xLow2 ) * 0.5 + xLow2 ; xTop3 = maxlist( xOpen3 , xClose3 ); xBottom3 = minlist( xOpen3 , xClose3 ); xMid3 = ( xHigh3 - xLow3 ) * 0.5 + xLow3 ; xTopShadow = xHigh - xTop ; xTopShadow1 = xHigh1 - xTop1 ; xTopShadow2 = xHigh2 - xTop2 ; xTopShadow3 = xHigh3 - xTop3 ; xBottomShadow = xClose - xLow ; xBottomShadow1 = xClose1 - xLow1 ; xBottomShadow2 = xClose2 - xLow2 ; xBottomShadow3 = xClose3 - xLow3 ; xBodySize = xTop - xBottom ; xBodySize1 = xTop1 - xBottom1 ; xBodySize2 = xTop2 - xBottom2 ; xBodySize3 = xTop3 - xBottom3 ; {IF xBodySize > xBodyAvg THEN LONG CANDLE } xBodyAvg = XAverage( xBodySize , Length ) ; xBodyAvg1 = XAverage( xBodySize , Length ) ; xBodyAvg2 = XAverage( xBodySize , Length ) ; xBodyAvg3 = XAverage( xBodySize , Length ) ; {-----------------------------} { One day pattern recognition } {-----------------------------} {Gravestone Doji set{body_top,max(open,close)} set{body_bottom,min(open,close)} show stocks where body_top is less than .05 percent above body_bottom and body_bottom equals low and body_top more than .5 percent below high } If sFound1Day = false and xOpen = xLow and xClose = xLow and xHigh > xLow then begin xTriggerTime1 = Time; fg1 = white; bg1 = BLACK; tInd = tInd + " 1:Neutral" ; t1DayPattern = "Gravestone Doji" ; sFound1Day = true ; end; { Dragon Fly Doji set{body_top,max(open,close)} set{body_bottom,min(open,close)} show stocks where body_top is less than .05 percent above body_bottom and body_top equals high and body_bottom more than .5 percent above low } If sFound1Day = false and xTop = xBottom and xTop = xHigh and xHigh > xLow then begin xTriggerTime1 = Time; fg1 = white; bg1 = BLACK; tInd = tInd + " 1:Neutral" ; t1DayPattern = "Dragon Fly Doji" ; sFound1Day = true ; end; {DOJI close = open} If xClose = xOpen then begin fg1 = cyan; bg1 = BLACK; end; { "Inverted Hammer" } If sFound1Day = false and xClose = xLow and xHigh > xOpen and xClose < xOpen then begin xTriggerTime1 = Time; fg1 = green; bg1 = BLACK; tInd = tInd + " 1:Bullish" ; t1DayPattern = "Inverted Hammer" ; sFound1Day = true ; end; { Hammer set{body_bottom,min(open,close)} set{body_top,max(open,close)} set{lshadowsize, body_bottom - low} set{tshadowsize, high - body_top} set{body_size, body_top - body_bottom} set{body_size2, body_size * 2} show stocks where tshadowsize is less than 0.001 and lshadowsize > body_size2 and close decreasing for the last 3 days and body_top < close 1 day ago } If sFound1Day = false and xClose = xHigh and xBottomShadow > (xBodySize * 2) and xClose < xClose1 and xClose1 < xClose2 and xClose2 < xClose3 and xTop < xClose1 then begin xTriggerTime1 = Time; fg1 = green; bg1 = BLACK; tInd = tInd + " 1:Bullish" ; t1DayPattern = "Hammer" ; sFound1Day = true ; end; { "Hanging Man" } {set{body_bottom,min(open,close)} set{body_top,max(open,close)} set{lshadowsize, body_bottom - low} set{tshadowsize, high - body_top} set{body_size, body_top - body_bottom} set{body_size2, body_size * 2} show stocks where tshadowsize is less than 0.001 and lshadowsize > body_size2 } If sFound1Day = false and xHigh = xTop and xBottomShadow > (xBodySize * 2) then begin xTriggerTime1 = Time; fg1 = red; bg1 = BLACK; tInd = tInd + " 1:Bearish" ; t1DayPattern = "Hanging Man" ; sFound1Day = true ; end; { Marubozo SHOULD BE LAST OF THE ONE DAY PATTERNS } { Marubozo A candlestick with no shadow extending from the body at either the open, the close or at both. The name means close-cropped or close-cut in Japanese, though other interpretations refer to it as Bald or Shaven Head. } If sFound1Day = false then begin if xOpen = xHigh or xOpen = xLow or xClose = xHigh or xClose = xLow then begin xTriggerTime1 = Time; fg1 = white; bg1 = BLACK; tInd = tInd + " 1:Neutral" ; t1DayPattern = "Marubozo" ; sFound1Day = true ; end; end; // If sFound1Day = false {-----------------------------} { two day pattern recognition } {-----------------------------} {"Engulfing" } If sFound2Day = false and xTop > xTop1 and xBottom < xBottom1 then begin xTriggerTime2 = Time; fg2 = white; bg2 = BLACK; tInd = tInd + " 2:Neutral" ; t2DayPattern = "Engulfing" ; sFound2Day = true ; end; {Bearish Kicking show stocks where body_top equals high and body_bottom equals low and body_top 1 day ago equals high 1 day ago and body_bottom 1 day ago equals low 1 day ago and body_top more than .5 percent above body_bottom and body_top 1 day ago more than .5 percent above body_bottom 1 day ago and close below open and close 1 day ago above open 1 day ago and open equals open 1 day ago } If sFound2Day = false and xTop = xHigh and xBottom = xLow and xTop1 = xHigh1 and xBottom1 = xLow1 and xTop1 > ( xBottom1 + ( xBottom1 * .005) ) and xClose < xOpen and xClose1 > xOpen1 and xOpen = xOpen1 then begin xTriggerTime2 = Time; fg2 = red; bg2 = BLACK; tInd = tInd + " 2:Bearish" ; t2DayPattern = "Bearish Kicking" ; sFound2Day = true ; end; {Bullish Kicking Pattern set{body_bottom,min(open,close)} set{body_top,max(open,close)} show stocks where body_top equals high and body_bottom equals low and body_top 1 day ago equals high 1 day ago and body_bottom 1 day ago equals low 1 day ago and body_top more than .5 percent above body_bottom and body_top 1 day ago more than .5 percent above body_bottom 1 day ago and close above open and close 1 day ago below open 1 day ago and open equals open 1 day ago } If sFound2Day = false and xTop = xHigh and xBottom = xLow and xTop1 = xHigh1 and xBottom1 = xLow1 and xTop > ( (xBottom + xBottom * .005) ) and xTop1 > ( (xBottom1 + xBottom1 * .005) ) and xClose > xOpen and xClose1 < xOpen1 and xOpen = xOpen1 then begin xTriggerTime2 = Time; fg2 = green; bg2 = BLACK; tInd = tInd + " 2:Bullish" ; t2DayPattern = "Bullish Kicking" ; sFound2Day = true ; end; { Harami } If sFound2Day = false then begin Value1 = C_BullHar_BearHar( Length, oBullishHarami, oBearishHarami ) ; if oBullishHarami = 1 then begin xTriggerTime2 = Time; fg2 = green; bg2 = BLACK; tInd = tInd + " 2:Bullish " ; t2DayPattern = "BullishHarami" ; sFound2Day = true ; end else if oBearishHarami = 1 then begin xTriggerTime2 = Time; fg2 = red; bg2 = BLACK; tInd = tInd + " 2:Bearish " ; t2DayPattern = "BearishHarami" ; sFound2Day = true ; end ; end ; // If sFound2Day = false { PierceLine_DkCloud } If sFound2Day = false then begin Value1 = C_PierceLine_DkCloud( Length, oPiercingLine, oDarkCloud ) ; if oPiercingLine = 1 then begin xTriggerTime2 = Time; fg2 = green; bg2 = BLACK; tInd = tInd + " 2:Bullish " ; t2DayPattern = "PiercingLine" ; sFound2Day = true ; end else if oDarkCloud = 1 then begin xTriggerTime2 = Time; fg2 = red; bg2 = BLACK; tInd = tInd + " 2:Bearish " ; t2DayPattern = "DarkCloud" ; sFound2Day = true ; end ; end ; // If sFound2Day = false { ShootingStar } If sFound2Day = false then begin if C_ShootingStar( Length, Factor ) = 1 then begin xTriggerTime2 = Time; fg2 = green; bg2 = BLACK; tInd = tInd + " 2:Bearish " ; t2DayPattern = "Shooting Star" ; sFound2Day = true ; end ; end ; // If sFound2Day = false {-------------------------------} { three day pattern recognition } {-------------------------------} { { "Evening Star" } If sFound3Day = false and xClose2 > xOpen2 and xOpen1 > xClose2 and xClose<> xOpen and xClose < xMid2 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; t3DayPattern = "Evening Star" ; sFound3Day = true ; tInd = tInd + " 3:Bearish" ; end; } {Shooting Star - bearish set{body_bottom,min(open,close)} set{body_top,max(open,close)} set{lshadowsize, body_bottom - low} set{tshadowsize, high - body_top} set{tshadowsize2, tshadowsize * 2} set{body_size, body_top - body_bottom} show stocks where lshadowsize is less than 0.001 and tshadowsize2 > body_size and close increasing for the last 3 days and body_bottom > close 1 day ago } If sFound3Day = false and xOpen = xLow and (xTopShadow * 2) > xBodySize and xClose > xClose1 and xClose1 > xClose2 and xClose2 > xClose3 and xBottom > xClose1 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; t3DayPattern = "Shooting Star" ; sFound3Day = true ; tInd = tInd + " 3:Bearish" ; end; {inverted hammer set{body_bottom,min(open,close)} set{body_top,max(open,close)} set{lshadowsize, body_bottom - low} set{tshadowsize, high - body_top} set{body_size, body_top - body_bottom} set{body_size2, body_size * 2} show stocks where lshadowsize is less than 0.001 and tshadowsize > body_size2 and close decreasing for the last 3 days and body_top < close 1 day ago } If sFound3Day = false and xClose = xLow and xTopShadow > (xBodySize * 2) and xClose < xClose1 and xClose1 < xClose2 and xClose2 < xClose3 and xTop < xClose1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish" ; t3DayPattern = "Inverted Hammer" ; sFound3Day = true ; end; {Bearish Engulfing set{body_bottom,min(open,close)} set{body_top,max(open,close)} show stocks where body_top above body_top 1 day ago and body_bottom below body_bottom 1 day ago and close below open and open 1 day ago below close 1 day ago and close 1 days ago increasing for the last 3 days } If sFound3Day = false and xTop > xTop1 and xBottom < xBottom1 and xClose < xOpen and xClose1 > xClose2 and xClose2 > xClose3 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; tInd = tInd + " 3:Bearish " ; t3DayPattern = "Bearish Engulfing" ; sFound3Day = true ; end; {Bullish Engulfing set{body_bottom,min(open,close)} set{body_top,max(open,close)} show stocks where body_top above body_top 1 day ago and body_bottom below body_bottom 1 day ago and close above open and open 1 day ago above close 1 day ago and close 1 days ago decreasing for the last 3 days } If sFound3Day = false and xTop > xTop1 and xBottom < xBottom1 and xClose > xOpen and xOpen1 > xClose1 and xClose1 < xClose2 and xClose2 < xClose3 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "Bullish Engulfing" ; sFound3Day = true ; end; {3WhSolds_3BlkCrows} If sFound3Day = false then begin Value1 = C_3WhSolds_3BlkCrows( Length, Percent, o3WhiteSoldiers, o3BlackCrows ) ; if o3WhiteSoldiers = 1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "3WhiteSoldiers"; sFound3Day = true ; end else if o3BlackCrows = 1 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; tInd = tInd + " 3:Bearish " ; t3DayPattern = "3BlackCrows"; sFound3Day = true ; end ; end ; // If sFound3Day = false { C_MornStar_EveStar } If sFound3Day = false then begin Value1 = C_MornStar_EveStar( Length, oMorningStar, oEveningStar ) ; if oMorningStar = 1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "Morning Star"; sFound3Day = true ; end else if oEveningStar = 1 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; tInd = tInd + " 3:Bearish " ; t3DayPattern = "Evening Star"; sFound3Day = true ; end ; end ; // If sFound3Day = false { C_MornDoji_EveDoji } If sFound3Day = false then begin Value1 = C_MornDoji_EveDoji( Length, Percent, oMorningDojiStar, oEveningDojiStar ) ; if oMorningDojiStar = 1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "Morning Doji Star"; sFound3Day = true ; end else if oEveningDojiStar = 1 then begin xTriggerTime3 = Time; fg3 = red; bg3 = BLACK; tInd = tInd + " 3:Bearish " ; t3DayPattern = "Evening Doji Star"; sFound3Day = true ; end ; end ; // If sFound3Day = false { Stick Sandwich A bullish reversal pattern with two black bodies surrounding a white body. The closing prices of the two black bodies must be equal. A support prices is apparent and the opportunity for prices to reverse is quite good. } If sFound3Day = false then begin if xClose2 < xOpen2 and xClose1 > xOpen1 and xClose2 > xOpen and xClose = xClose2 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "Stick Sandwich"; sFound3Day = true ; end; end ; // If sFound3Day = false { Abandoned Baby Bullish A rare reversal pattern characterized by a gap followed by a Doji, which is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third day. } If sFound3Day = false then begin if xLow2 > xHigh1 and xClose1 = xOpen1 and xLow > xHigh1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bullish " ; t3DayPattern = "Abandoned Baby"; sFound3Day = true ; end; end ; // If sFound3Day = false { Abandoned Baby Bearish How to Identify it First day is usually a long white day Second day is a doji that gaps in the direction of the previous trend The third day is a black day, gapping in the opposite direction, with no overlapping shadows } If sFound3Day = false then begin IF xBodySize2 > xBodyAvg2 and xClose1 = xOpen1 and xLow1 > xHigh2 and xClose < xOpen and xHigh < xLow1 then begin xTriggerTime3 = Time; fg3 = green; bg3 = BLACK; tInd = tInd + " 3:Bearish " ; t3DayPattern = "Abandoned Baby"; sFound3Day = true ; end; end ; // If sFound3Day = false { Downside Tasuki Gap A continuation pattern with a long black body followed by another black body that has gapped below the first one. The third day is white and opens within the body of the second day, then closes in the gap between the first two days, but does not close the gap. } If sFound3Day = false then begin IF xBodySize2 > xBodyAvg2 and xClose2 < xOpen2 and xBodySize1 > xBodyAvg1 and xClose1 < xOpen1 and xHigh1 < xLow2 and xClose > xOpen and xOpen > xClose1 and xOpen < xOpen1 and xClose > xHigh1 and xClose < xLow2 then begin xTriggerTime3 = Time; fg3 = yellow; bg3 = BLACK; tInd = tInd + " 3:Continuation " ; t3DayPattern = "Downside Tasuki Gap"; sFound3Day = true ; end; end ; // If sFound3Day = false {Upside Tasuki Gap A continuation pattern with a long white body followed by another white body that has gapped above the first one. The third day is black and opens within the body of the second day, then closes in the gap between the first two days, but does not close the gap. } If sFound3Day = false then begin IF xBodySize2 > xBodyAvg2 and xClose2 > xOpen2 and xBodySize1 > xBodyAvg1 and xClose1 > xOpen1 and xLow1 > xHigh2 and xClose < xOpen and xOpen > xOpen1 and xOpen < xClose1 and xClose < xLow1 and xClose > xHigh2 then begin xTriggerTime3 = Time; fg3 = yellow; bg3 = BLACK; tInd = tInd + " 3:Continuation " ; t3DayPattern = "Upside Tasuki Gap"; sFound3Day = true ; end; end ; // If sFound3Day = false { plots } If t1DayPattern <> "" then begin Plot1( NumToStr(xTriggerTime1,0) + " " + t1DayPattern, "1Bar Pattern", fg1 ) ; SetPlotBGColor( 1, bg1); end; If t2DayPattern <> "" then begin Plot2( NumToStr(xTriggerTime2,0) + " " + t2DayPattern, "2Bar Pattern" , fg2 ) ; SetPlotBGColor( 2, bg2); end; If t3DayPattern <> "" then begin Plot3( NumToStr(xTriggerTime3,0) + " " + t3DayPattern, "3Bar Pattern" , fg3 ) ; SetPlotBGColor( 3, bg3); end; Plot4( tInd, "Message", fg4 ) ; SetPlotBGColor( 4, bg4); xComm = _fCommentary(oComm1, oComm2, oComm3, oComm4, oComm5, oComm6, oComm7, oComm8, oComm9, oComm10); CommentaryCl(oComm1 ); CommentaryCl(oComm2 ); CommentaryCl(oComm3 ); CommentaryCl(oComm4 ); CommentaryCl(oComm5 ); CommentaryCl(oComm6 ); CommentaryCl(oComm7 ); CommentaryCl(oComm8 ); CommentaryCl(oComm9 ); CommentaryCl(oComm10 ); CommentaryCl( " xOpen = ", NumToStr( xOpen , iDecimals) ) ; // Open ; // CommentaryCl( " xOpen1 = ", NumToStr( xOpen1 , iDecimals) ) ; // Open[1] ; // CommentaryCl( " xOpen2 = ", NumToStr( xOpen2 , iDecimals) ) ; // Open[2] ; // CommentaryCl( " xOpen3 = ", NumToStr( xOpen3, iDecimals) ) ; // Open[3] ; // CommentaryCl( " xClose = ", NumToStr( xClose , iDecimals) ) ; // close ; // CommentaryCl( " xClose1 = ", NumToStr( xClose1 , iDecimals) ) ; // close[1] ; // CommentaryCl( " xClose2 = ", NumToStr( xClose2 , iDecimals) ) ; // close[2] ; // CommentaryCl( " xClose3 = ", NumToStr( xClose3 , iDecimals) ) ; // close[3] ; // CommentaryCl( " xHigh = ", NumToStr( xHigh , iDecimals) ) ; // High ; // CommentaryCl( " xHigh1 = ", NumToStr( xHigh1 , iDecimals) ) ; // High[1] ; // CommentaryCl( " xHigh2 = ", NumToStr( xHigh2 , iDecimals) ) ; // High[2] ; // CommentaryCl( " xHigh3 = ", NumToStr( xHigh3 , iDecimals) ) ; // High[3] ; // CommentaryCl( " xLow = ", NumToStr( xLow , iDecimals) ) ; // Low ; // CommentaryCl( " xLow1 = ", NumToStr( xLow1, iDecimals) ) ; // Low[1] ; // CommentaryCl( " xLow2 = ", NumToStr( xLow2 , iDecimals) ) ; // Low[2] ; // CommentaryCl( " xLow3 = ", NumToStr( xLow3 , iDecimals) ) ; // Low[3] ; // CommentaryCl( " xTop = ", NumToStr( xTop , iDecimals) ) ; // maCommentaryCl( " xlist( "CommentaryCl( " xOpen , CommentaryCl( " xClose ) ; // CommentaryCl( " xBottom = ", NumToStr( xBottom, iDecimals) ) ; // minlist( "CommentaryCl( " xOpen , CommentaryCl( " xClose ) ; // CommentaryCl( " xMid = ", NumToStr( xMid, iDecimals) ) ; // ( "CommentaryCl( " xHigh - CommentaryCl( " xLow ) * 0.5 ; // CommentaryCl( " xTop1 = ", NumToStr( xTop1 , iDecimals) ) ; // maCommentaryCl( " xlist( "CommentaryCl( " xOpen1 , CommentaryCl( " xClose1 ) ; // CommentaryCl( " xBottom1 = ", NumToStr( xBottom1 , iDecimals) ) ; // minlist( "CommentaryCl( " xOpen1 , CommentaryCl( " xClose1 ) ; // CommentaryCl( " xMid1 = ", NumToStr( xMid1 , iDecimals) ) ; // ( "CommentaryCl( " xHigh1 - CommentaryCl( " xLow1 ) * 0.5 ; // CommentaryCl( " xTop2 = ", NumToStr( xTop2 , iDecimals) ) ; // maCommentaryCl( " xlist( "CommentaryCl( " xOpen2 , CommentaryCl( " xClose2 ) ; // CommentaryCl( " xBottom2 = ", NumToStr( xBottom2 , iDecimals) ) ; // minlist( "CommentaryCl( " xOpen2 , CommentaryCl( " xClose2 ) ; // CommentaryCl( " xMid2 = ", NumToStr( xMid2 , iDecimals) ) ; // ( "CommentaryCl( " xHigh2 - CommentaryCl( " xLow2 ) * 0.5 ; // CommentaryCl( " xTop3 = ", NumToStr( xTop3, iDecimals) ) ; // maCommentaryCl( " xlist( "CommentaryCl( " xOpen3 , CommentaryCl( " xClose3 ) ; // CommentaryCl( " xBottom3 = ", NumToStr( xBottom3 , iDecimals) ) ; // minlist( "CommentaryCl( " xOpen3 , CommentaryCl( " xClose3 ) ; // CommentaryCl( " xMid3 = ", NumToStr( xMid3 , iDecimals) ) ; // ( "CommentaryCl( " xHigh3 - CommentaryCl( " xLow3 ) * 0.5 ; // CommentaryCl( " xTopShadow = ", NumToStr( xHigh , iDecimals) ) ; // " xTop ) ; // CommentaryCl( " xTopShadow1 = ", NumToStr( xHigh1 , iDecimals) ) ; // " xTop1 ) ; // CommentaryCl( " xTopShadow2 = ", NumToStr( xHigh2 , iDecimals) ) ; // " xTop2 ) ; // CommentaryCl( " xTopShadow3 = ", NumToStr( xHigh3 , iDecimals) ) ; // " xTop3 ) ; // CommentaryCl( " xBottomShadow = ", NumToStr( xClose , iDecimals) ) ; // " xLow ) ; // CommentaryCl( " xBottomShadow1 = ", NumToStr( xClose1 , iDecimals) ) ; // " xLow1 ) ; // CommentaryCl( " xBottomShadow2 = ", NumToStr( xClose2 , iDecimals) ) ; // " xLow2 ) ; // CommentaryCl( " xBottomShadow3 = ", NumToStr( xClose3 , iDecimals) ) ; // " xLow3 ) ; // CommentaryCl( " xBodySize = ", NumToStr( xTop , iDecimals) ) ; // " xBottom ) ; // CommentaryCl( " xBodySize1 = ", NumToStr( xTop1 , iDecimals) ) ; // " xBottom1 ) ; // CommentaryCl( " xBodySize2 = ", NumToStr( xTop2 , iDecimals) ) ; // " xBottom2 ) ; // CommentaryCl( " xBodySize3 = ", NumToStr( xTop3 , iDecimals) ) ; // " xBottom3 ) ; // { Bullish Upside Tasuki Gap Bullish Side-by-Side White Lines Bullish Separating Lines Bullish Three Line Strike Bullish Upside Gap Three Methods Bullish xHigh arami Cross Bullish Three xOpen utside Down Bullish Three Inside Up Bullish xHigh xOpen ming Pigeon Bullish xHigh arami Bullish Morning Doji Star Bullish Tri-Star Bullish Meeting Lines Bullish Unique Three Rivers Bullish Abandoned Baby Bullish Matching Low Bullish Engulfing Bullish Concealing Baby Swallow Bullish Three White Soldiers Bullish Kicking Bearish Upside Tasuki Gap Bearish Side-by-Side White Lines Bearish In Neck Bearish Separating Lines Bearish Three Line Strike Bearish Downside Gap Three Methods Bearish Thrusting Bearish xOpen n Neck Bearish xHigh arami Cross Bearish Three xOpen utside Up Bearish Three Inside Down Bearish xHigh arami Bearish Evening Doji Star Bearish Tri-Star Bearish Meeding Lines Bearish Advance Block Bearish Identical Three Crows Bearish Abandoned Baby Bearish Two Crows Bearish Engulfing Bearish Dark Cloud Cover Bearish Three Black Crows Bearish Kicking Bearish Deliberation Hanging Man }

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Old 03-17-2007, 02:45 AM
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Re: [Volume Based Candles] and how to profit

Hello guys,

I am a newcomer into this thread.... I've been having trouble keeping up with all the posts that come across on this board now. It's growing! But man! How did I miss this thread?

Amazing stuff brownsfan... it got me studying volume charts for the past 2 hours What triggered my attention was your statement on how you want to see the fight and not the breather. That is so true it blows my mind that I never though of it. I have a few things that I want to clarify, hopefully you guys can help me out.

First, I am experimenting with a 1000 share bar chart. Is this correct? Or do you guys use a 1000 tick count chart? Also, Im still trying to find the ideal count on the YM... so any input on this would be appreciated.

Also, I want to go over the absolute basics of volume. In an uptrend, a healthy trend will show more volume on the rally and less on the decline. Now with the volume chart, would this be shown by more candles printing on the rally and less on the decline? Also, when plotting a volume chart is it not possible to plot the volume histogram panel as well? My TS is having issues doing this.

Now one of the things I am having trouble seeing is the comparison in volume at a double top or a test. I like to watch for less volume on a test of the highs or lows. With a volume chart how would one observe this? Does one need to gain a feel of the fast/slow process of candle formation?

Also, great explanation on the chart Paul. And good point on candles not offering profit targets. My question is what determines your exit point? If the same confirmation method is being used for an exit, wouldnt you leave a good amount of points on the table? This is the hardest part I have with using candles.... the exit point. Due to my nature as a pivot and tape reader, I do look for exits at a pivot. Now majority of the time I end up exiting too early. Exiting early is something I can live with... but exiting too early is a horrible habit. Wide range candles is also an exit bar that I look for... just curious to see how you guys exit based on candles. Thanks

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Old 03-17-2007, 10:25 AM
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Re: [Volume Based Candles] and how to profit

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At this early stage of my recent volume candle enlightenment, I have come to the conclusion that volume candles are the most accurate v/s all other types of chart reading.

I now believe this because volume candles equalize each bar's importance. With "VCs", no bar means more or less than the last or the next. They just tell a story. A story you can trust because you know what each VC represents.

With time or tick based bars, you don't know the importance of any bar. You don't know how much emphasis to put on any bar or pattern. You can't trust them. You might as well use a line.

Now there are other indicators that may quantify volume but none will be as accurate as the VCs because VCs are the indicator!

Most importantly, it evens out the chart. It doesn't matter what volume interval you use because whichever interval you choose, all bars represent the same.

Wow, this is deep. I think this just saved me about $25,000 or more. I'm a total believer. It's so clear to me now. Thanks again. Wow, that all I can say. Wow...... :rolleyes:
Robert - I will be happy to accept a 50% 'savings' fee of that $25k. Just send me a PM and we can arrange for the bank wire of $12.5.

Thanks!

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Old 03-17-2007, 10:30 AM
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Re: [Volume Based Candles] and how to profit

Paul - great chart with explanations.

I think you found a great example where the candlesticks worked well.

There looks to be another nice short around 12:30pm on your chart as well - two hanging men back-to-back. And then about 5 hammers that signified that down move was over and a small move up on those hammers.

I will say this - I LOVE hammers/hanging men. I actually call hanging men 'inverted hammers' simply b/c I see hammers easily. I don't see the hanging man. So, if I ever write inverted hammer, it's just an upside down hammer.

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Old 03-17-2007, 10:39 AM
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Re: [Volume Based Candles] and how to profit

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Here ia a Candle Pattern Recognition TradeStation RadarScreen Indicator.

Good ol Rumpled one.
Robert,
You bring up something that needs to mentioned -
I HIGHLY RECOMMEND YOU LEARN TO READ CANDLES FOR YOURSELF.

Do NOT rely on a computer program to find your candle formations.

Why?

Here's why:
  • Computer programs do not have the 'flexibility' to be able to see a candle pattern.
  • You are relying on someone's interpretation of candle formations and the ability to put them into code.
  • You really need to know how these work, look, feel, etc. before relying on a computer program. It's like when you learn how to add and subtract in school... why bother when there are calculators? You need to LEARN it before turning it over to a computer.
I cannot stress how important this is. I've tested many, many programs out there and other than Nison's MarketScan (which is only on his website, not a downloadable program), I have not found ANY worthwhile.

Here is my opinion - when I see a 'hammer' a program may not simply b/c the shadow/wick is not quite long enough. In intraday trading, you MUST be flexible on what you call a hammer b/c the picture perfect hammer does not show every day. And if you rely on that program to find your hammers, you'll be sitting waiting for the perfect one b/c the program is set by design to find the textbook hammer. Well, as we all know - real life doesn't always look like textbooks. If so, we'd all be multi-millionaires from trading by now.

Robert and others that are studying this - take the time to purchase Nison's books/DVD's and learn to find these on your own. When I looked at the charts posted here, it took me a whole 2 minutes to just see all the candle patterns on them. And that comes from training your eyes and repetition.

Just my 2 cents...

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Old 03-17-2007, 10:58 AM
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Re: [Volume Based Candles] and how to profit

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Hello guys,

I am a newcomer into this thread.... I've been having trouble keeping up with all the posts that come across on this board now. It's growing! But man! How did I miss this thread?

Amazing stuff brownsfan... it got me studying volume charts for the past 2 hours What triggered my attention was your statement on how you want to see the fight and not the breather. That is so true it blows my mind that I never though of it. I have a few things that I want to clarify, hopefully you guys can help me out.

First, I am experimenting with a 1000 share bar chart. Is this correct? Or do you guys use a 1000 tick count chart? Also, Im still trying to find the ideal count on the YM... so any input on this would be appreciated.

Also, I want to go over the absolute basics of volume. In an uptrend, a healthy trend will show more volume on the rally and less on the decline. Now with the volume chart, would this be shown by more candles printing on the rally and less on the decline? Also, when plotting a volume chart is it not possible to plot the volume histogram panel as well? My TS is having issues doing this.

Now one of the things I am having trouble seeing is the comparison in volume at a double top or a test. I like to watch for less volume on a test of the highs or lows. With a volume chart how would one observe this? Does one need to gain a feel of the fast/slow process of candle formation?

Also, great explanation on the chart Paul. And good point on candles not offering profit targets. My question is what determines your exit point? If the same confirmation method is being used for an exit, wouldnt you leave a good amount of points on the table? This is the hardest part I have with using candles.... the exit point. Due to my nature as a pivot and tape reader, I do look for exits at a pivot. Now majority of the time I end up exiting too early. Exiting early is something I can live with... but exiting too early is a horrible habit. Wide range candles is also an exit bar that I look for... just curious to see how you guys exit based on candles. Thanks

Hey Soul! Welcome to the party!

I'll try to tackle your questions and I'm sure others will have opinions as well.

YM Chart settings - It really depends on how 'fast' you want the candles to print. I use under 1000, closer to 500. That's just me, I like things to print. The actual # is not important. It's simply how quickly do you want things to print. And the type of chart on TS you want is the Share Bar Chart.

Trends - in a good moving trend, you should see more candles being printed. It's amazing to watch them fire off during a move, esp around econ news. As for a volume histogram, I don't see the point since each bar will be identical. If you set your chart to say 500 on the YM, each volume bar/histogram if displayed separately will be exactly 500. That may be why TS doesn't like it.

Double tops - you are correct, since each candle on a volume based chart is identical in volume, you have to learn to read the candles better. For example, in Mr. Paul's post with a chart, there is actually a nice double top. See my attachment. To me, there is a clear as day double top with two very nice looking inverted hammers (aka hanging men). For a traditional candlestick trader, that's a reason to short right there. You could actually short the first leg, which was a small winner or loser, and then reshort on the double top test and have a nice trade.

Exit point - here is probably the biggest issue with candles, in my opinion. They offer clearly defined entries and stops. Profits however, not so much. Here are the options that I have found:
  • Fixed profit target sitting out there.
  • Trailing stop.
  • Exit only when a candle pattern that is opposite of your current trade appears.
  • Some combination of these if trading more than 1 lot.
And there is no perfect answer, you have to test different setups and see what you like.
Attached Images
File Type: png candles.png (220.2 KB, 100 views)

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Old 03-17-2007, 11:59 AM
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Re: [Volume Based Candles] and how to profit

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Robert,
You bring up something that needs to mentioned -
I HIGHLY RECOMMEND YOU LEARN TO READ CANDLES FOR YOURSELF.

Do NOT rely on a computer program to find your candle formations.

Why?

Here's why:
  • Computer programs do not have the 'flexibility' to be able to see a candle pattern.
  • You are relying on someone's interpretation of candle formations and the ability to put them into code.
  • You really need to know how these work, look, feel, etc. before relying on a computer program. It's like when you learn how to add and subtract in school... why bother when there are calculators? You need to LEARN it before turning it over to a computer.
I cannot stress how important this is. I've tested many, many programs out there and other than Nison's MarketScan (which is only on his website, not a downloadable program), I have not found ANY worthwhile.

Here is my opinion - when I see a 'hammer' a program may not simply b/c the shadow/wick is not quite long enough. In intraday trading, you MUST be flexible on what you call a hammer b/c the picture perfect hammer does not show every day. And if you rely on that program to find your hammers, you'll be sitting waiting for the perfect one b/c the program is set by design to find the textbook hammer. Well, as we all know - real life doesn't always look like textbooks. If so, we'd all be multi-millionaires from trading by now.

Robert and others that are studying this - take the time to purchase Nison's books/DVD's and learn to find these on your own. When I looked at the charts posted here, it took me a whole 2 minutes to just see all the candle patterns on them. And that comes from training your eyes and repetition.

Just my 2 cents...