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.