[brownsfan019]

James,
Sorry I haven't chimed in, just real busy lately.

Here's my take on the ES:

At least 3 nice hammers near the 50 and 200 SMA. There's nothing bearish about this price action at all.




Now, there's a few ways to interrupt the current chart...

1) The multiple hammers suggest that the bears are trying but the bulls are defending this area well. Could result in a break to the upside.

2) There's so much fighting taking place here that one side is going to roll over sooner or later and give up. Either the bears are going to say enough is enough and stop fighting or the bulls will simply run out of steam to keep pushing the bears back. Could result in a break to the downside.

What I am trying to say is that I normally would feel great about 3 hammers but watching these charts intraday as I do, I'm not totally feeling the bullish love here. I would normally like to see a hammer and then a push up. Not a whole bunch of fighting back and forth. This price action would also indicate that there are probably some large long and short positions being built up here as well. Sooner or later one will win and when that happens, the amount of stops that could be taken out could be large.

Looking just at the daily, I would remain long and be cautious around 1550 or so. There's no reason to exit a short currently if just using the daily as your guide.

[brownsfan019]

And not surprising, the YM looks very similar:

[brownsfan019]

James,
I took a look at the blog and wanted to provide some feedback here, so we can discuss it if you would like.

First, awesome job! I like the layout and everything. I don't care for blogs where the writing is squished between a left and right border, so I like your layout. Not sure if it's perfect blogging technique, but who cares!

Second, it looks like candles are making an impact on your trading and that's awesome (in my opinion)! With that being said, I think you need to really study them if you want to learn them better. Here are my suggestions for candlestick study (and the order in which I do them):

1) Steve's Free Newsletter

2) The Candlestick Course

3) Japanese Candlestick Charting Techniques, Second Edition (Hardcover)

4) Nison DVD workshops

5) A Live Seminar. Make sure it's a seminar where he is the ONLY one teaching. You do NOT want a seminar that is partnered up with Calhoun, Headley or any of the other marketing whores Steve is now aligned with.

A few notes about my suggestions here:
1) The cost goes up incrementally, so keep that in mind.
2) I've actually fallen out with Steve, so as much I don't want to suggest you purchase his materials, they are the best out there. My beef with Steve, in case anyone is reading this wondering, is that he's recently partnered up with some other trading 'gurus' that I don't think very highly of. So while I think Steve is basically a marketing whore, the materials listed above are very good.

---------------------------

With that being said James, I think the main focus of your attention right now is how you are defining your support and resistance zones. Right now, it appears some moving average combo is doing this for you. My suggestion is to take a harder look at PAST candles to help you here. See some of my posts all over the board where I've outlines S/R zones and there's ZERO moving averages on them. Now, when the moving averages line up with your S/R zones, even better. For example, our ES example here this week was just that - a hammer at/near two standard SMA's (50 and 200), along with some candlestick support. Nice confluence there.

I think your journey into the candles is going well, but I think how you define your S/R is absolutely critical and just using moving averages could provide some false signals.

[Nick1984]

I've noticed that you guys in your swing analysis are using SMA"s pretty exclusively and that the S/R's seem to be mainy visualally generated? Do you use the daily/weekly/monthly pivots as well? I've usually found that when I was swing trading stocks, price didn't really respect the SMA's anywhere near as much as the EMA's. I guess that is based on how the lines are calculated, the SMA will have a lot more 'noise' than an EMA. Each to their own I guess though hehe.

The candlestick analysis has been fantastic though, and all this discussion sparked my interest in candles much more to the point where I've been analysing them a lot recently and I must say I actually find them very comfortable. I actually ordered Japanese Candlestick Charting Techniques from Amazon about a week ago so hopeflly it will come soon!

[brownsfan019]

Originally Posted by Nick1984 »

I've noticed that you guys in your swing analysis are using SMA"s pretty exclusively and that the S/R's seem to be mainy visualally generated? Do you use the daily/weekly/monthly pivots as well? I've usually found that when I was swing trading stocks, price didn't really respect the SMA's anywhere near as much as the EMA's. I guess that is based on how the lines are calculated, the SMA will have a lot more 'noise' than an EMA. Each to their own I guess though hehe.

The candlestick analysis has been fantastic though, and all this discussion sparked my interest in candles much more to the point where I've been analysing them a lot recently and I must say I actually find them very comfortable. I actually ordered Japanese Candlestick Charting Techniques from Amazon about a week ago so hopeflly it will come soon!

Nick,
I do not use pivots - intraday or swing. If you find that these levels are respected or provide some confluence, please share here as we are always looking for stronger S/R levels.

As for SMA vs EMA, I mainly look at the 50 and 200 SMA on dailys mainly for some confluence with my S/R candle zones. In other words, I would prefer to have both of these line up together. And the reason for the 50 and 200 SMA is b/c those are common settings and ones that many traders look at.

[james_gsx]

I like to use the 8 and 21 EMA when they come across as being useful. Sometimes that's simply not the case and they just seem to be "noise" in which case I follow S/R and the 50 and 200.

Brownsfan, thanks for the advice. I am studying Steve Nisons Candlestick Course now and it's definitely helping me out. I will read it more than once though, so I can have a full understanding of all the ideas taught in the book.

Are there any other candle "gurus" that you like?

[brownsfan019]

Originally Posted by james_gsx »

Are there any other candle "gurus" that you like?

Honestly, it's all the same stuff just with a different spin. Different names or formations, but the same stuff. I like Nison's materials b/c they are the best in my opinion.

The only other candle guy I used to frequent was http://www.candlestickforum.com The forum is not that active though and like I said, same stuff just different names.

[OAC]

Originally Posted by james_gsx »

I like to use the 8 and 21 EMA when they come across as being useful. Sometimes that's simply not the case and they just seem to be "noise" in which case I follow S/R and the 50 and 200.

Brownsfan, thanks for the advice. I am studying Steve Nisons Candlestick Course now and it's definitely helping me out. I will read it more than once though, so I can have a full understanding of all the ideas taught in the book.

Are there any other candle "gurus" that you like?

How about who I like ? Stephen Bigalow would be another one.