Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.
wrbtrader
-
Content Count
314 -
Joined
-
Last visited
Posts posted by wrbtrader
-
-
...I'm having trouble grasping why a lone candlestick might work. Is it because so many people look for it to happen thus self-fulfilling the prophesy or something else entirely?Single candlestick interval analysis is not reliable if you implied analyzing and making trade decisions based upon one candlestick line.
As for candlestick patterns (more than one interval), it's best to use them in combo with another trade approach as already echoed in this thread.
Simply, don't use them all by themselves.
Mark
-
Here are a few things to think about when trading reversals.
* Reversal signals may occur via technical reasons, price action of other key markets, economic news, world breaking news, political news or combo of any other events that has impact on market direction.
* It's not uncommon to see a reversal price action also be a trend continuation price action at the same time depending upon how much of the price action you are viewing on your charts.
Simply, to truly understand reversal signals, there's often a lot more to it than just technical reasons and they're very dynamic. It's that understanding that will allow you to be better prepared to trade because you'll know when they have a high probability chance of occurring regardless if you trade trend reversal or trend continuation signals.
-
Btw, does NihabaAshi still post here, I seem to remember he was a clever guy over at ET...Just found this related thread...
http://www.traderslaboratory.com/forums/f34/how-do-you-spot-reversals-893.html
Hi Firewalker,
I'm mainly a lurker here and I not clever nor do I try to out smart the markets.
I just try to understand what it is doing and that in itself helps with my confidence while trading.
Mark
-
For those of you that trade for a living, do you hang out in an online trading room (chat or voice) during the day or trade quietly at home without the company of other traders? I ask this question because trading is boring and can be a lonely career. How do you prevent yourself from getting bored? Do you listen to the radio or music while trading? For those of you that hang out in a trading room, where is it located? Thanks.It depends upon your definition of Boring.
If you meant to said you are bored because you lack the comarade from other traders...try some chat rooms (the free ones).
However, if you are bored because you think its "too quiet" in your house while trading...listen to music, listen to or watch TV involving a financial network.
However, keep in mind that CNBC, Bloomberg, RobTV et cetera are designed for traders to use any info that's useful to their trading although I consider them to be excellent financial networks about anything involving the markets especially the FED related discussions.
Simply, if you're going to use them, use them properly as in for entertainment and educational purpose only...not for trading decisions.
Another option is to get an actual office somewhere that requires you to commute back and forth from work to help take away some of that boredom you may be feeling because it'll keep you busy in a different way.
Yet, that's only an option if you're a consistently profitable trader that can afford such easily.
Back to chat rooms, there are hundreds of free chat rooms on Paltalk and IRC...just type those words with trading words and you'll know where some are and then join those rooms.
Most are listed (public) while others are private (requires registration or you need to know someone to get in).
Once your in a few room (most are distractions)...you can then start learning about other rooms to fine tune your search of a room that's appropriate for you (not a distraction).
Last of all, I myself watch Bloomberg TV (radio and Satalite) on low volume when I'm bored but when I'm busy...I'm mainly just listening to music.
P.S. Don't watch Bloomberg or any other financial network online on the same computer your trading from. Thus, use them on a second computer and the same with music if you're listening to online music.
Best Regards,
-
The discussion is really a strategy specific discussion.
Therefore, the strategy will dictate which is best to derive patterns signals (futures, index or ETF).
I use futures, index and ETF and neither has an advantage over the others.
To be specific, I currently mainly trade the Russell 2000 Emini ER2 futures via a volatility based strategy that allows me to exploit volatility.
However, I monitor the Russell 2000 Index and the exchange traded fund IWM.
Further, for me, my strategies allows for me to use all three (side by side) on my monitors and it gives me an advantage in comparison to only concentrating on one of them.
Simply, the odds increase that I do get a pattern signal when following all three instead of following just one.
Once again, those that sees an advantage in one versus the other its only because the strategy is suited for such whereas someone using a completely different strategy may see no advantage what so ever.
-
James,Good charts.
I'm thinking of just taking a break from posting updates and providing all this work when it's just you and I discussing. I'll be around and keep the CC alive, but when it's one or two people talking alone on a forum, it gets old real quick. There's obviously not that much interest and I have no desire to put together charts with annotations and then document that here when very few are going to take a look.
I was actually thinking of starting my own little trading blog, so maybe I'll just do that. I can post my thoughts and charts and not be concerned about who is interested on a forum. I enjoy talking candles and trading here, but there's just little interest at this point and I hate feeling like I am wasting time when I've got a lot going on right now and time is precious.
I had a Japanese Candlestick pattern analysis blog once.
I use to post daily charts, analysis, broker statments and an occassional video of an actual trade of a candlestick pattern (you could see my chart and broker platform in the video from entry to exit).
Very little interest I got except for an occasional message that Japanese Candlesticks don't work even though I was very profitable (except for a few trading days) along with showing verification of the profits.
My point, if your going to start a blog...don't do it for others nor for educational purpose.
Instead, do it for yourself regardless if you only get 1 visitor per week or 100,000 visitors per day and you just may be able to endure much longer than most in maintaining a trading blog.
Simply, if you do it for others...that's when potential problems begin.
Last of all, its a lot of work maintaing a blog (I lasted only 4 months in doing a blog).
-
Hopefully this will make more sense.Went short at 12:42 MT at 1452.75
I saw a potential top on the 5 minute chart, the second red candle you see was where I went short as I viewed it as confirmation. Shortly after the tape slowed, and price went higher where I eventually got out at 1454.00 for a 1.25 ES loss.
Hi James,
Thanks for the clarification.
Taking a second look at the price action of your entry...there's no valid candlestick pattern to prompt a trade entry.
However, I do see two consecutive Hanging Man (Hangman) candlestick lines but the low price of the first Hangman line (green) failed to test the mid-body range of the prior candlestick line.
The second Hangman line (red) did not close > close of the prior Hangman (green).
Also, the best Hangman Lines to trade are the ones involved in Close of Dark Hangman (red) > Close of the prior White Line (green) or Open of White Hangman (green) > Close of the prior White Line (green) or Open of the prior Dark Line (red).
Simply, it's involved as a GAP strategy which also implies it's one of those particular candlestick price action that's mainly suitable for higher chart frames.
Yet, as I hinted above, I also like to see the low of the Hangman test the mid-body price area of the prior candlestick line (preferrably a wide range body line) especially when the prior candlestick line is not a Hangman to tell me that the price rise is showing true signs of exhaustion (profit taking occurring) in comparison to when existing Longs sitting (not taking profits) in their positions waiting for new buyers to show up to take it higher...
Especially in price action where the Hangman is involved in a price action that's acting like a higher high in comparison to the prior swing point.
Last of all, my favorite Hangman variation involves price action where its a lower high in comparison to the prior swing point.
This type of price action also makes it much easier to manage a losing trade if the trade breaks to the upside prior to the stop/loss being hit via allowing me to look for position reversing (reversing the trade from a short into a long) opportunity.
-
Alright, my first trade was profitable with a 2.50 ES gain. My second trade was a mistake by me, and I saw what I did wrong and lost 1.00. My third and 4th trades were basically break even since I saw my entry points were bad and immediately got out.This trade bothers me though, not sure what I did wrong. You'll see we had a spinning top (I think?) then confirmation after that, I went short on the 2nd red candle at 1452.75 where price stood at a standstill for some time. I got stopped out at 1454 essentially wiping out my gains for the day. I'm wondering if I saw the chart right, and it just didn't work out or if I did something wrong?
It's hard to follow you here because you show a spinning top that's annotated on your chart soon after 7:30am.
Yet, you said you went short after that on the 2nd red candle.
However, you have annotations about going show all the way over on the right side of the chart between 11:30am - 12:30pm as if that's where you went short at???
What time did you short Emini ES???
Regardless, there's a old saying in trading...
Don't let a profitable trade turn into a losing trade.
Anyways, one of the key aspects of Japanese Candlesticks is the trade management after entry.
That leads me into this question...
What needs to happen in your trade to prompt you to go to +1 tick trailing stop to pay for the trade if the trailing stop is hit in comparison to a true breakeven trade that's really a losing trade once you add in commission costs.
-
I am using Fibonacci Trader. In the candlestick setup there is an option for Heiken Ashi mode. I can see the visual differences however, I do not understand the technical implications. Of course the help files within the platform do not address this feature. I have yet to find a definition or explanation in any net searches. your help would be greatly appreciated.Thank you,
Richard III:confused:
Hi Richard,
I've used Heiken Ashi charts (many years ago) exclusively for one thing...
Volatility Analysis.
It was easier to see volatility change via contraction/expansion in intervals as price action traverse from one interval to the next interval.
Thus, HA charts was extremely useful for identifying volatility changes which is a critical aspect of my trading.
However, on the flip side, it put me at a disadvantage for GAP Analysis and Support/Resistance Analysis which are other critical aspects of my trading.
Thus, I went back to normal candlestick charts and learned how to see the volatility changing without the help of HA.
Simply, HA charts presents itself as a smoother flow (more blending) of the price action from interval to interval...
Reason why some traders that use HA will use the phrase its easier to see the trend.
However, that's ok if gap analysis, long shadow analysis or support/resistance analysis isn't part of your trade methodology.
-
Here's some charts that happened today when my system fired off some signals, I'm trying to incorporate candlestick analysis to aid my decisions, but I'm not trading directly off candlestick analysis.First off, I'm a newbie when it comes to candlestick analysis, so go easy on me;)
All charts are short term tick charts.
1st chart fired off a buy signal, but the two previous candles were trying to go higher but pushed down very fast in real time, then the signal was generated. I decided to step aside as although my system generated a buy signal, the candles were telling me otherwise.
http://www.traderslaboratory.com/forums/attachment.php?attachmentid=2340&stc=1&d=1187044986
2nd chart fired off a short signal but on that candle was also a dragonfly doji, so I passed on the trade, however would have turned out to be a winner.
http://www.traderslaboratory.com/forums/attachment.php?attachmentid=2341&stc=1&d=1187044986
3rd chart fired off a buy signal and also had the bonus of it being a hammer, I took the trade as it gave me extra confidence.
I think basically what I'm trying to say is that I'm starting to look at candlestick patterns to filter my trades, I'm still very new to this candlestick analysis but it looks so promising that it's got my full attention.
I've just ordered Steve Nison's book ( Japanese Candlestick Charting Techniques) so hopefully I can digest the concept better.
Cheers
Blu-Ray
Hi Blu-Ray,
Thanks for the charts.
Also, what's your primary trade methodology (generally without going into any in-depth details) so that we can understand better what your using candlesticks with.
For example, I know some scalpers using Japanese Candlesticks with their Market DOM analysis.
With that said, here are some things you should keep in mind as a new user of Japanese Candlestick Analysis:
* Start very slow. Thus, select only a few patterns to study, research and trade for the first year of using Japanese Candlestick Analysis and Hammer patterns are one of the best place to start because they provide a wealth of information such as new support/resistance zones.
For example is your 3rd chart, that Bullish Hammer pattern became an s/r zone via producing a swing point...a swing point that later had impact on another Bullish Hammer pattern about 23 intervals later.
Now take a look at your 2nd chart involving the Dragon Fly...scan backwards (to the left)...what do you see?
You see a lot of Inverted Hammers with long upper shadows producing a s/r zone that the Dragon Fly was able to exploit.
Simply, Hammer patterns involved in swing points represent Candlestick S/R Zones.
What about the 1st chart?
First of all, there's no confirmation signal or a s/r zone to give that Long Legged Doji support to push higher unlike the Dragon Fly in the 2nd chart that had an established resistance area from the prior price action involving Inverted Hammer lines.
Therefore, if Dojis or Hammers are involved in a swing point, regardless if you trade them or not...
Don't forget about them because they can help setup trades later in the trading day or provide excellent profit targets for other trades.
For example of profit targets, go back to your 2nd chart involving that Dragon Fly.
Now scan backwards about 13 or 14 intervals to those back to back (consecutive) Hammer lines.
Those Hammer lines produce a swing point that sent price upwards until the formation of the Dragon Fly.
Had you taken that Short positiong involving the Dragon Fly, you could have used those earlier Hammer lines as profit targets especially since those Hammer lines occurred after a WRB (red wide range body on your chart).
Therefore, hypothetically, you could have exited that Short signal (Dragon Fly) about 8 - 9 intervals later.
Once again, start slow especially now that you will soon get your hands on Steve Nison book.
Use the book as a Definition Only and not as a trading plan.
Further, your going to have access to many different types of patterns and the last thing you want to do is try to learn them all or try to apply them all.
Just pick a few patterns and in my opinion Hammer patterns are one of the best places to start.
That should keep you busy the first year of learning about Japanese Candlestick Analysis.
P.S. Eurex DAX is an excellent trading instrument for Hammer pattern trading.
-
...An example, of which is pondering me would be, if a bullish hammer appears at a strong resistance level, would that be taken as a long signal or would you just stand aside?Blu-Ray
Hi Blu-Ray,
It's extremely important for you that when asking questions about a particular price action situation to post a chart example that correlates with the question to prevent any misunderstandings.
I myself tend to not respond nor participate in discussions when charts aren't posted to support questions about specific price action associated with Japanese Candlestick Analysis because it too often leads to misunderstandings.
For example, this is how I interpreted your question.
Your talking about price rising up and above a existing resistance level to only drop back down to that resistance level that may be now acting like a support level along with the appearance of a Bullish Hammer pattern...
Correct???
Also, your use of the term strong resistance implies that the price action had tested that level on prior occasions and then retraced.
Thus, the retracement gave merit that it was a resistance level that got confirmed.
I myself can't answer that question unless I closely examine the price action that had risen and then drop to the resistance (support) level when the Bullish Hammer pattern appeared.
I can't imagine stepping aside unless you have some facts (stats) to support that's a time to ignore this bullish pattern.
-
NihabaAshi, I don't think YM gets a huge amount of professional interest, apart from arbitrage programs. Apart from the arbs it's mainly small and medium sized retail traders that trade YM. Just compare the lot sizes on the YM tape (more than 100 is unusually large) to the ES tape (not unusual to see 1000 lots going through). Most professionals are trading the stocks, the GLOBEX futures or the CME pit so it makes sense, if one believes that following the professionals is important, to use the rth for equities and CME i.e. 0930 to 1600 or 1615. Of course noting the overnight action is important but interesting overnight action often begins much earlier than 0820.Also this whole debate will soon be academic because YM is transferring to GLOBEX early next year so you may as well start getting used to it now.
The issue here is Japanese Candlestick analysis for those that plan on using it.
You have a choice to use an alter picture or not.
Further, the fact that the high end data vendors do not alter that picture while the low end data vendors tend (not all of them but most of them) do alter that picture should concern anyone doing Japanese Candlestick analysis on YM.
I just can't imagine calling up my data provider and tell them to include an option to alter YM because most of my retail trading pals are using the CME session time for YM instead of the CBOT session time for YM.
Simply, I use what my data provider gives me and what they give me is not an alter image.
Further, as you noted, next year all data vendors will be on the same page when YM transfers and this will no longer be an issue for new traders.
Yet, for definition discussions, just don't be surprised that some traders have different candlestick patterns for YM in comparison to others.
Therefore, the issue isn't really (as I noted before) if its a Doji, Shooting Star or Inverted Hammer on that 15min YM chart.
The issue is do we understand the price action to see that it was bearish.
-
Hi NihabaAshi,Thanks for your detailed answer.
Till now, I used the same start time as (it seems to me) most traders here with the regular trading sesson. With the eSignal adv. Chart-Tool I have the possibility to create different time templates. So, with my annotated chart I would show you that it is possible with eSignal, to create a chart with a start time 8:20am. I already used different time frames, but no one, that started at 8:20am. If you say, that the professionals use this start time, the I have to make some changes in my charts.
I already asked several people, how they look on a 60 min chart. Start time 0930am, 1030am .. or 0930am, 0010am, 0011am? Now, I have a new version like 0820am, 0920am and so on. Most sad, that an hourly chart ends at the full hour. It seems, that you have another opinion?
I'm a little confused now, because as you allready mentioned, a change in the time template makes also changes for the candlestick formations.:rolleyes:
Yep, that also means that YM with a 0820am est regular chart time has a last interval of the trading day not equal in time duration for particular intervals such as the 15min chart interal even though the last interval will end at 4:15pm est.
For example, the last chart interval for the 3min chart really only has 1min worth of transactions.
However, the time template has no problem with the 1min, 5min chart as examples in that all intervals are equal in time duration.
Also, your chart example proved me wrong in that eSignal now has the option of showing the 0820am est data whereas in the past it did not.
Yet, there are still many other low tier data providers still using the 0930am est regular session start time for YM.
By the way, this discussion is not aimed at veteran traders because they tend to understand the price action. Thus, they aren't too caught up with what type of Bearish or Bullish pattern it is.
They just want to know if its Bullish or Bearish via their understanding of the markets and don't get too boggy down about what type of chart pattern just occurred.
Regarding times...if one is to be a purest, then sure, you can use those times. I would ask, though...what is the rest of the world watching? I would bet that taking a poll of a thousand traders who trade the YM, their charts aren't set to start at 8:20am EST. So, if they arent watching those charts, then what are they most likely watching? I know lots of people I speak with watch charts that start at 9:30am for the regular session.I would rather watch what everyone else watches, but that's just me. So my charts are set for 9:30-4:15 for the YM.
Hi TinGull,
Most retail traders I know (mainly online trading pals) are using YM with a regular trading session start time of 0930am est whereas in comparison the professional firm traders are using 0820am est.
However, understanding the price action prior to the appearance of any pattern signal makes this discussion unimportant.
Once again, this discussion is not aimed at veteran traders because they tend to understand the price action.
This discussion is aimed at newbie traders applying Japanese Candlestick analysis because they tend to put more emphasis on the candlestick pattern (it defines the price action) instead of understanding the price action.
As for me, I've been using the 0820am est start time for YM regular session chart and will continue to do so especially since its caused me no problems in my intermarket analysis with other key markets.
Just keep in mind that most of the traders I personally know are pro traders whereas those I know online tend to be retail traders.
Simply, the guys I have beers with or hang out with in person are using the 0820am YM regular session chart and that obviously has impact on my bias.
Thus, if a 0930am YM regular hour start time works fine for you...keep using it.
Further, I completely agree with what cooter said in that YM on the CBOT should have the same start time as the CME Eminis to keep everything uniform.
Why its not that way is very odd.
To notouch, most retail traders are using the 0930am regular session chart except for most professional traders.
Therefore, not every man and his dog are watching the 0930am as a start time.
However, your absolutely correct in that there's not much action between 0820am - 0930am est except for when there's a 0830am est key economic report(s).
That's when the 0820am est price action becomes very useful along with setting up possible support/resistance zones for trades that occurs after 0930am est.
Therefore, its info that's important on some trading days.
Last of all, anybody check out the regular session start time of EuroFX on the CME...it's 0820am est.
Go figure. :mad:
-
NihabaAshi,I have some problems to understand your last annotation about the YM start time. On the CBOT site I see the trading hours for the YM last from 6:15 pm to 4:00 pm. I cannot find anything, who changes at 8:20 am. So, please give me some hints, why the start time should be at 8:20 am
With eSiganl, I have the possibility to create another time frame with your recommended start time. (Look annotated chart)
Thanks for your explications
Hi Habi,
I'm not sure if I understand your question because your obviously using CBOT time for YM and not CME time for YM due to the fact your chart shows YM regular session chart with an open @ 0820am est and a close of that same first 15min interval @ 0835am est.
Also, the CBOT website does not show the actual start time of YM (open auction).
Instead, it shows that "Electronic" hours as 6:15pm - 4:00pm cst (chicago time).
In contrast, the CBOT does show the atual open auction time of its other DJIA futures product to be 7:20am - 3:15pm (chicago time)...
Convert that to my est and its 8:20pm - 4:15pm est.
Thus, like my data vendors, our charts do not show a Shooting Star nor a Inverted Hammer pattern as seen on TinGull chart.
Thus, I'll explain it a different way.
I'm talking about the regular trading session charts...not globex (all session) charts that has all the overnight data.
Some data vendors has there regular trading charts set for YM to start at 0930am est so that it correlates with the rth time of the EMD, ER2, ES and NQ on the CME.
Any data vendor that shows YM regular trading chart to start at 0930am has altered YM so that it correlates with EMD, ER2, ES and NQ.
My point is that YM regular trading chart starts at 0820am est and if your regular session chart shows that...
Your ok.
Another way to look at it, your first 15min chart interval for the day in YM via the regular session chart should show that first 15min interval to have open at 0820am and closed at 0835am est.
Thus, if your YM 15min regular session chart shows the first 15min interval to have open at 0930am and closed at 0945am est...
Your using a data vendor that has alter its YM info so that it correlates with the regular session start times of the other Eminis.
A few years back, there were some data vendors that didn't even include the trades between 4pm - 4:15pm est for the Index Futures so that it correlates with their stock chart information.
I saw a few such charts (can't remember the names of the data vendors other that their costs was extremely cheap) over at another discussion forum I post at.
All I'm saying is this, when doing Japanese Candlestick analysis, just be aware that your using getting all the data and not data that has been clipped off the front or end because such data will alter your Candlestick patterns when you begin increasing your chart intervals.
Thus, if your analyzing 1min chart intervals at exactly 10am est...it doesn't matter if your using a data vendor that shows YM to start at 0820am, 9am or 0930am est.
However, things change quickly as soon as you go to the 3min chart for Japanese Candlestick analysis.
-
Mark,Thanks for sharing. The post I was referring to has since been deleted by Pivot or a mod. The post I was referencing was VERY specific on how you use candles and I simply said we need to expound further on this or it's of little use since very few here, outside of Pivot and you, understand the analysis.
Hi brownsfan,
Thanks for the clarification because I didn't know there was another post by pivot that was removed prior to my arrival to this thread.
-
Pivot - what you are discussing is specific to Mark's using of candles and unless he is willing to post every detail on how they are used, I'm having trouble understanding how any reference to that is useful. As we both know, Mark uses candlesticks in his own fashion and it obviously works for him; however w/o specific resources made available to the readers here, esp newbies to candlestick analysis, no one can follow your post.Hi brownsfan,
Pivot has made no reference in this thread to how I use Inverted Hammers or Shooting Star candlestick patterns even though he did say he was curious (waiting) for my input after he made the Doji commentary.
With that said, I do not consider what Tin showed on his YM 15min chart a doji candlestick pattern.
Also, Inverted Hammers and Shooting Stars are commonly mixed up.
Yet, as long as we understand the price action that generated that trade signal...it really doesn't matter which one is which unless we are talking definitions only and not trade signal stuff.
Further, I want to explain my own use of that phrase...
understanding the price action.
It's simple, do not use Japanese Candlesticks to define/explain the price action.
Instead, you should understand the price action prior to the appearance of any pattern signal regardless if we are using Japanese Candlesticks or some other trading methodology.
This is probably going to be a dumb post, but I am new to candlestick analysis so bear with me.Basically in this "tin's bearish candle" price action first went up, then there was an absence of buyers and the sellers were able to take over and push price lower. Hence why you'd go short the next candle, because obviously buyers were non-existent and sellers were plentiful?
Now if it was a doji, how would you interpret it on this chart?
Hi james,
Lets assume that was a doji or your own personal interpretation has it as a doji regardless if others agree or not.
Without getting into all the extensive backtesting I've personally done on +10 years of intraday data on many different types of futures trading instruments...
Doji's require confirmation from the price action that follows within the next several intervals.
Thus, in TinGull's chart...changing the Inverted Hammer to a Doji...best to wait for confirmation that either sellers has control or that buyers are unwilling to push prices higher (there's a difference).
However, waiting for the confirmation is the real problem with trading with Inverted Hammers, Shooting Stars or Doji patterns.
Sometimes that confirmation produces price action that doesn't allow for a good reward due to what you know about the price action the pattern formed within.
In contrast, the price action (your understanding of it prior to the appearance of the candlestick pattern) reveals there's a good reward.
Just as important or more important, this allows you to better manage your trade via candlesticks accordingly to the price action involved because a pattern signal at 10am is much different than the same pattern signal at 2pm (different risk:reward scenarios sort'uv speak).
My point is this, sometimes you have a valid Doji pattern with confirmation but not a valid trade because the reward potential is not good enough for whatever goals you have via what you know (understand) about the price action.
I'm not trying to make this seem complex.
I'm trying to tell you why most traders struggle with finding consistent profits via Japanese Candlestick patterns because there is a lack of understanding of the price action these patterns appear within.
Regardless, in the beginning, keep it simple as much as possible while you gain the experience (it will take several years) to move into the complex stuff involving proper trade management of Inverted Hammers, Shooting Stars or Doji patterns because they are some of the most difficult patterns to trade profitably on a consistent basis.
Sorry about the rant and getting back to James question...
I use multiple time frames side by side and my chart of YM lower intervals (2min, 3min and 5min) reveals shrinking volatility followed by a volatility spike that lead into the price area of the Doji (pretending it was a Doji).
That volatility spike is followed by the Doji and that's indecision all by itself.
Indecision in that will the increased in volatility lead into rising volatility for the next several intervals with prices going up instead of down?
Simply, to remove the question mark you should wait for confirmation via the 15min chart or get clues about that Doji via the lower chart intervals to tell you if its ok to Short or go Long in that Doji.
My point is this...whenever you have a question mark about the price action of a candlestick pattern...drop to a lower chart interval to see if the question mark goes away (you have answers).
Therefore, my lower chart intervals suggest it would have been ok to Short that Doji whereas the 15min chart interval all by itself would have me waiting for confirmation in the next interval that appeared after the Doji (pretending it was a Doji).
______________________
Finally, I want to mention a well known problem with YM that's rarely discussed.
YM is on the CBOT. Whereas the EMD, ER2, ES and NQ are on the CME.
The CBOT has a different start time for YM than the other Eminis on the CME.
The top tier (the best stuff out there) data vendors recognize this and leave it as is.
However, many of the lower tier data vendors like eSignal et cetera have changed or altered the start time of YM on their charts to correlate with the start time of the other Eminis on the CME.
This causes particular intervals (like the 15min chart interval) for YM to be different from other data vendors that do not alter their CBOT start times.
Simply, the candlestick pattern will be different when comparing lower tier data vendors with top tier data vendors.
This is problematic for any trader that puts more emphasis on the candlestick pattern instead of understanding the price action because what they see may not be the true image.
Thus, if your YM 15min chart intervals goes like 0930am, 0945am, 1000am, 1015am and so on...
You're using one of those lower tier data vendors that has altered the CBOT start time.
This may not be a big deal to most but if you truly want to see the same image that the big boys are seeing (ex. institutional traders)...
Your data should be showing 0820am, 0835am, 0850am, 0905am, 0920am, 0935am, 0950am and so on.
I myself, it is a big deal after spending many trading days visiting the offices of close personal friends that are institutional traders and other traders working for firms (no prop stuff) in the trading business. ...
Simply, I want to see exactly what they are seeing especially when I'm doing Japanese Candlestick analysis even though I have a good understanding of the price action.
Yep, my chart on YM 15min does not show a Shooting Star, Inverted Hammer nor a Doji but the price action is the same (Bearish).
-
There are two methods you can do this: mechanically or manually. Mechanically means you write a small program with criteria (indicators, price action, etc) where if met, the signals will generate an entry and/or exit. Tradestation, Esignal, and several others offer this. Manually, when a system want to test out cannot be done via mechanical method (overly complex system or indicators that cannot be based on math etc), then you manually have to walk through historical data and mark entries/exits and calculate the results yourself.I prefer the manual route of backtesting because it allows me to develop a stronger understanding of the price action that's generating the trade signals along with many other benefits especially since every trading day is not the same.
The only benefit I had when I used the mechanical route via a backtesting software was the speed of data crunching.
Thus, although the manual route can take up your entire weekend to derive results in comparison to a software that can do such much faster...
I'm able to see the impact of different types of market conditions that show their face during the manual backtesting that I was unable to see during the mechanical route.
-
Thanks for sharing Mark!Are you able to share with us what coach(es) you have used in the past and your thoughts of each?
Better question - are you, yourself, a coach now? I ask b/c you obviously have years and years of profitable experience and you would seem to be a logical choice for traders!
Hi brownsfan,
My step-father was my first mentor in many ways when he was a floor trader at the time.
However, at that time I was a teenager just learning about what moves the market and I was not doing any trades.
The second mentor (the one mentioned in my first post) I do not want to reveal his name even though I believe I was the only one he ever mentored.
I myself do not mentor although I do get solicitations for such about 2 - 3 per month.
Yet, if I did mentor, I don't think anyone could afford me and the link below explains my personal views about mentoring programs.
http://www.traderslaboratory.com/forums/f30/educational-trading-programs-1657.html#post9866
Mark
-
We've all heard the adages that pro athletes and other top performers in their fields have coaches. An outside 3rd party that only has your interest at heart.So my question is - has anyone dealt with a trading coach and how was/is the experience? I know the mod's don't care for websites to be posted for co's, but I would like as open and honest feedback as possible.
I'm sure some might say why bother and others may see the possible value here. It's the old Tiger Woods question, right? Why does the top golfer in the world need a coach? My point being that at what stage(s) of a trading career should a coach be present, if at all?
I've had a trading mentor (coach) and it made a huge difference in fine tuning my approach to trading the markets.
He taught about all the things that makes a difference between being a profitable trader or a losing trader and those things had very little to do with my strategies.
In fact, when he visited me, immediately he saw many things I was doing wrong that had impact on my trading before I even tuned on the darn computer.
Further, he refused to work with me until I corrected those problems.
That's why I always recommend to traders to visit any trader mentor (coach) to see how he/she trades and teaches prior to investing time/money in that individual.
It doesn't stop there because a good mentor (coach) will do the same and that's the initial relationship I had with my mentor.
My point is that you really need to know what your problems are prior to soliciting a trader mentor (coach) and/or be lucky enough to find someone that can identify your trading needs prior to getting involved with you.
Therefore, its extremely difficult to find a right match and that's why many top athletes will move from one mentor/coach to the other until they find the right one.
Even then after they find the right one...they usually only stick with the mentor/coach until they move into a different stage of their athletic career that requires a different type of mentor/coach.
Also, some top athletes have more than one type of mentor/coach that deals with a specific task involving the athlete.
Thus, I strongly feel traders are no different in that as our career develops...
We need to be alert that its time to get a different type of help when looking for improvements in our trading when such improvements can't be done.
Getting help doesn't imply mentoring (coach).
Mark
-
I have been watching WRBs for over a month now. In my analysis, the majority of the time they are not a good entry or exit point.Before getting anyone worked up I'll just point out the value I do think they have, and why.
My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare).
So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar.
This testing would be the point of entry or exit if you are using this methodology. 2 cents.
I hope you realize there are different types of WRBs.
Also, I've been using WRBs for +15 years and I myself don't use them as an entry signal all by themselves.
In analogy, its kind'uv like using a White Hammer Line as a Long signal without understanding the price action that occurred prior to the White Hammer Line.
That leads me into this question...can you explain what type of WRB your testing as an entry signal and/or show a chart example.
Further, when you said the following...
My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare).
So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar.
The above is true only for one particular type of WRB and that particular type of WRB is not an entry signal.
It's a profit target and I can better explain it when you post a chart example.
For example, lets say the market is dropping and a particular type of Dark WRB (Open > Close) is produced in the declining price action.
Next, several intervals later you get a bullish signal...you can use the Open of that Dark WRB as a profit target.
Just keep in mind that some WRBs will attract the price action like a magnate to retrace the WRB while other WRBs will push the price action away in that there's price continuation away from the WRB into the range of a prior WRB s/r zone.
Regardless, using a WRB as an entry signal all by itself is not recommended and I myself don't even do that.
Last of all, your going in the right direction because your actually talking about Volatility Analysis and that's where WRBs begans to differ from each other.
However, I'm very curious at how your using WRBs via chart examples or specific details of your research because I strongly suspect your using them much different than I use them.
WRB's tells you something will soon happen and anything beyond that requires many years of experience with WRBs. Thus, they are a warning sign (precursors) that you should start looking for pattern signals.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
-
What pattern does your handle represent Mark if you don't mind me asking?Hi Nick,
Nihaba Ashi is not a pattern.
Instead, its just a term or phrase with the meaning foot steps.
Also, the word Ashi in martial arts implies foot or leg.
Thus, if another word follows after Ashi, for example, such as Ashi-Barai...
It implies leg sweep.
Mark
-
Although Japanese Candlesticks is only a secondary methodology to me...
My current favorites are Hammers, Haramis and Engulfing patterns.
However, if someone said I can only use one from the above, I would go with Hammer patterns.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
-
A quick question to Mark, you leave on audio recording on your video right? Do you talk yourself through the process of prepration and setups? Right now, I only have the audio off but trying to find a more effective way of using audio in it. Thanks.Hi torero,
Yes, most of the time I leave my audio recording on except for Monday's and Friday's because the kids are not at day care. :rolleyes:
As a at home based retail trader with my home office next to the kids play room...I do more typing in a chat room on Monday's and Friday's to compensate for the lack of info due to the audio being turned off.
I store all my daily trading recordings (video and audio) on DVD's that go back a few years worth of info.
Thus, after one week of recordings that's stored on my computer...I transfer them to DVD to keep.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
-
So I have been writing my trading plan for a while now, basically going over all of my strategies and exactly how I play them and my few exceptions. I was almost finished and about to type it all up when I realized I was missing something I think could be very important, my own self psychology.For the last few days I have basically been staring at a blank piece of paper with a title at the top that says Trading Plan - Psychology. I can't seem to get it started, and I don't know how to start. I finally just started writing down some of my emotions that I have noticed before in different trades. For example I always feel uneasy with a quick scalp trade, yet in a pivot or gap play I am very calm.
But other than that, I'm not really sure what to put down here. I'm hoping some of you guys could help guide me and add some suggestions. I was thinking maybe I could write down some emotional rules, for example the other day my best friends dad died and I took the rest of the day off because of it.I knew I would make bad decisions. But what are some other things I could look at?
Thanks a lot.
The trader psychology aspect of my trading plan involves a software called Camtasia Studio.
I record (screen video and audio) my trading day from entry to exit, from the first time I log on to when I log off.
This documents every day how I interacted with the markets and how other things in my life impacted my trading.
With that critical information, I can easily see things that have impact on my trading results that have absolutely nothing to do with my pattern signals.
For example, yesterday I traded with fear the entire trading day because I was having major ISP problems (their doing upgrades to their system).
Playing back my recording I can hear the frustration in my voice, anger and see that after I logged on to my system, I spent so much time trying to find a work around solution that my mouse movements on my screen shows that I wasn't prepared to trade when the market open.
My point, we all act differently to particular situations, Further, our reactions or interactions with the markets and our trading environment (at home or office) will repeat itself.
Thus, the best trading plan involving the psychological aspects of trading really can not be developed until after several problematic situations and if we don't document these problems...
It's too difficult to see how our personalities (who we are as a person) interacts with the markets.
Note: Make sure you have a powerful enough system to use Camtasia because their system requirements do not take into account that traders will be using it to record things like realtime graphs, broker platform, spreadsheets et cetera.
Also, I have no affiliation with Techsmith and I'm just a happy user of their program.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Trading Strategies
in E-mini Futures
Posted · Edited by wrbtrader
changed my signature
The overall price action of markets or individual trading instruments is too complex or dynamic (lots of variables) for one indicator or one strategy to work every trading day as in "one size fits all".
One trading day the price action is impacted by breaking news, another trading day it's impacted by technical reasons, another day it's impacted by a seasonal tendency, another day it's impacted by some regular schedule market event, another day it's impacted by global events and another day it's impacted by any combo of the above mentioned.
Here's another example of why "one size doesn't fit all"...pretend you're using a trend indicator/strategy and the markets decide to go into a tight trading range. Your trend method will either not give trade opportunities or the trades signaled will fail. Just the same, if you're using a range bound indicator/strategy and the markets decide to trend, the results will be less trade opportunities or the trades signaled will fail.
The general solution is too understand or learn about how dynamic the markets are from one trading day to the next trading day along with being able to adapt because the markets is forever changing...multiple times each year which is why most traders blow up or endure deep drawdowns because they're approaching the markets via that "one size fit all" mentality via the perspective of their indicator/strategy.
Therefore, via your pivot example...try to find commonalities among the trading days that those pivots, s/r levels or whatever worked and look for commonalities among the trading days when those pivots, s/r level et cetera didn't work...commonalities that has nothing to do with entry/exit signals.