Why Candlestick Anaylsis is Different and Might Work for You

[brownsfan019]

After spending countless hours on different trading forums, there seems to be one constant - very few discussions out there actually talk about real trades. Sure there's plenty of after the fact discussions and even then some discussions are foggy at best.

But not with candlestick analysis. As I've outlined here with the sticky threads at the top, once you put your trading arsenal together, off you go.

And then look at the threads buried here on TL - we have threads where actual trades are being discussed, sometimes we see blotters and many calls are done in real-time. Just look around.

I think this little nook on TL is worth so much more than many here would give it credit for. There is money being made in this corner, yet most on the forum would prefer to discuss whether a squat was a short or long. I have never seen more confused questions than the infamous VSA thread. Has there been ONE person to ever show they make money with that stuff? Just one????

Doesn't add up to me.

Since trading cannot possibly be as 'easy' as we try here in the CC (candlestick corner), it can't possibly work.

Call it what you want - candlesticks, price action, price reading, etc. - the underlying premise works. Visually candlesticks tell the story of the bulls and bears. And that's all this game is about - who is winning and what side will you be on?

[GCB]

I'd imagine all traders go through the period where they think the "secret" of the market can be unlocked by learning some sophisticated, esoteric analysis technique. The motivation is uncertainty and the goal is certainty. But there is no certainty in the market, except that if you can't find a trading technique simple enough to confidently follow you are going to be the source of income for somebody who does.

VSA seems to fall into the holy grail category. Way too complex. Market Profile isn't as bad, but I dumped it because it simply gave me too much to think about and didn't help much to begin with.

It's interesting that there seems to be so many people on this board who are into those two techniques.

[DbPhoenix]

I suspect that a large part of it has to do with making something which is essentially discretionary into something that's mechanical so that even the dumbest trader can use it, as long as he has the money to buy the software.

There's nothing especially demanding about gauging the balance between buying and selling to determine the path of least resistance (which is what volume spread analysis is supposed to be about). Nor is auction market theory particularly esoteric. In fact, the basics of it can be written on a 3x5 card.

But people don't want something they have to think much about. They want signals (Where do I enter?). Therefore, those who want to understand should not expect fascinating exchanges with those who are searching for instructions.

[raven4ns]

But people don't want something they have to think much about. They want signals (Where do I enter?). Therefore, those who want to understand should not expect fascinating exchanges with those who are searching for instructions.

Interesting observation DB.

Tim

[DbPhoenix]

	Quote:	raven4ns
	Interesting observation DB. Tim

And frustrating, if one is trying to find people to discuss trading with.

[Hlm]

It's not how you get the information but how you use it. Be it Candles, VSA, Market Profile, etc...it's about understanding how the timeframes/fractals are interacting with one another. It's about finding the spot where you can enter on a lower timeframe and exit on a higher. This can be done with any of the ways listed above.

For me personally, I like to see pure momentum on the smallest timeframe and use tick charts (story inside the bar). For my largest timeframe I use Market Profile because it gives me more information than a standard bar (daily for example). My central timeframe is 3m and consists largely on basic candle analysis. Could an individual trade successfully using ONLY "time" bar charts...yes. The important thing in my opinion is to have enough information displayed where you can see the smaller and larger forces at work around your main timeframe.

Back to the original post (got a little off topic there)...

What type of discussion exactly do you want to see over here at the CC? I do believe that many people do get caught up in the other areas and lose site of the 'basics'.

Is this where I insert "ALL HAIL CANDLESTICKS"?

[DbPhoenix]

	Quote:	Hlm
	Could an individual trade successfully using ONLY "time" bar charts...yes.

If one can see those little notches.

I use candles, time bars, and CVB. If I'm looking at movement, I'll use the time bar. If I need to know where the open and close are in relation to the high and low, I'll use candles (see above).

[Hlm]

	Quote:	DbPhoenix
	If one can see those little notches. I use candles, time bars, and CVB. If I'm looking at movement, I'll use the time bar. If I need to know where the open and close are in relation to the high and low, I'll use candles (see above).

Oh crap, nice catch DbPhoenix. What I meant was "candlesticks" . I only use OHLC Bars on fast tick charts when reading inside the candlestick. That keeps me focused on the actual movement versus the bull/bear colors. Again thank you...I didn't want anyone to get confused. As far as volume bars, I don't use any. The tick charts give me enough "market action" and much of my volume analysis is done via VWAP.

Side Note: "Via VWAP" is suprisingly fun to say. Go ahead, try it.

[DbPhoenix]

Actually, I didn't even notice. Candles, candlesticks, tomatoes, tomahtoes.....

[brownsfan019]

	Quote:	GCB
	I'd imagine all traders go through the period where they think the "secret" of the market can be unlocked by learning some sophisticated, esoteric analysis technique. The motivation is uncertainty and the goal is certainty. But there is no certainty in the market, except that if you can't find a trading technique simple enough to confidently follow you are going to be the source of income for somebody who does. VSA seems to fall into the holy grail category. Way too complex. Market Profile isn't as bad, but I dumped it because it simply gave me too much to think about and didn't help much to begin with. It's interesting that there seems to be so many people on this board who are into those two techniques.

GCB - first, nice to have you back. Second, as you could tell, there has been much concentration on those two areas.

	Quote:	Hlm
	It's not how you get the information but how you use it. Be it Candles, VSA, Market Profile, etc...it's about understanding how the timeframes/fractals are interacting with one another. It's about finding the spot where you can enter on a lower timeframe and exit on a higher. This can be done with any of the ways listed above. For me personally, I like to see pure momentum on the smallest timeframe and use tick charts (story inside the bar). For my largest timeframe I use Market Profile because it gives me more information than a standard bar (daily for example). My central timeframe is 3m and consists largely on basic candle analysis. Could an individual trade successfully using ONLY "time" bar charts...yes. The important thing in my opinion is to have enough information displayed where you can see the smaller and larger forces at work around your main timeframe. Back to the original post (got a little off topic there)... What type of discussion exactly do you want to see over here at the CC? I do believe that many people do get caught up in the other areas and lose site of the 'basics'. Is this where I insert "ALL HAIL CANDLESTICKS"?

Not sure where I thought this discussion would go HLM. Just felt like posting my observation.