[brownsfan019]

Originally Posted by Dinerotrader »

Brownsfan,
Really enjoy your comments here. I know you can't explain too much of your strategy but if you can post some "real time" trades based on candles here after you are done with your real money trades I would be greatful.

I frequently circle back to trying to use candles in my setups but keep on giving up on them because either they give me so many false reversal patterns or when price is at S/R and a good reversal occurs they don't produce a candle that I would have traded from. Something real time would be helpful if you end up with some spare time some day.
Thanks.

I'll see what I can do dinero. If you search the p/l thread, there's been a few that have identified where I entered. From there, you could piece it together.

I've said this often on this forum and I will repeat here - candlestick patterns by themselves are useless. You need some other confirmation to aid in using candlesticks. Also, the lower the timeframe the less reliable candlestick patterns are IMO. In other words, if you just buy any hammer you find, it will fail more than win. But give me a hammer @ strong support level(s) with maybe an oscillator or keltner channel, and we can talk.

As for deciphering candlestick patterns, just about any candlestick could be a 'pattern'. Again, you need more stuff w/ it but on intraday charts you have to remain flexible in your definitions of candlestick patterns. Most of Nison's work on this area revolved around daily charts when he wasn't being a referral whore. There's a reason they seem to work easier/stronger on daily charts - the longer the timeframe, the stronger the candlestick pattern by itself.

[brownsfan019]

Here's a great example from today's ZS chart that I posted in the p/l thread. There's a gorgeous candlestick pattern there at the HOD. Now if you had some resistance there on your charts that could be a valid short.

[Dinerotrader]

Originally Posted by brownsfan019 »

Here's a great example from today's ZS chart that I posted in the p/l thread. There's a gorgeous candlestick pattern there at the HOD. Now if you had some resistance there on your charts that could be a valid short.

I saw that on the P/L thread. I spent a few hours marking up some charts around that reversal. I tried a few different VBC charts of various contract sizes and some tick charts. I have a hard time lately using time charts lately since, IMO , it appears that they conceal so much of the price action and its associated volume.

Should I just use one scale on a chart (i.e. VBC 1000 contracts) to look for candles or do you think it is useful to watch several types/scales for a good reversal candle pattern near S/R?

[Dinerotrader]

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

If you can catch the right breakout downward you would possibly hold if for months if there is no retracement to your breakeven position. Whenever I see huge reversals from predictable S/R, I always wonder what it would be like to try to enter at some key reversal points and try to hold the position for a long term period. I'd like to experiement with some of those long term positions after I get these intraday setups making money.

Does anyone take longer positions based on these large scale charts?

[brownsfan019]

Originally Posted by Dinerotrader »

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

If you can catch the right breakout downward you would possibly hold if for months if there is no retracement to your breakeven position. Whenever I see huge reversals from predictable S/R, I always wonder what it would be like to try to enter at some key reversal points and try to hold the position for a long term period. I'd like to experiement with some of those long term positions after I get these intraday setups making money.

Does anyone take longer positions based on these large scale charts?

Nice chart Dinero, looks good.

IMO you should perfect one way of trading (intraday or swing) before 'experimenting' with other setups. There's not much use in having a whole bunch of ideas that kind of work vs. 1 solid, reliable setup. If the goal is to make money, then you need to perfect that 1 strategy. From there you have to decide if you want to daytrade or swing and start there.

As for your chart - you could argue a great place to be looking to short based on past resistance and/or time for a breakout as the 3rd time is the charm. If it was me and I really believed in this area, I'd be willing to go both ways and see what happens. As long as it doesn't chop (and it can) eventually you'll be on the right side.... but I'm a reversal guy so I'd be licking my chops to short.

[forrestang]

Originally Posted by Dinerotrader »

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

Awesome Chart and observation for this thread!

I agree w/BrownsFan, if I were looking at this big picture like you posted, my bias would be either way. And it seems like an obvious way to expect the current trend to happen. It will either reverse or breakout, nonetheless the future big picture resolutions seems clear.

[brownsfan019]

Originally Posted by Dinerotrader »

I saw that on the P/L thread. I spent a few hours marking up some charts around that reversal. I tried a few different VBC charts of various contract sizes and some tick charts. I have a hard time lately using time charts lately since, IMO , it appears that they conceal so much of the price action and its associated volume.

Should I just use one scale on a chart (i.e. VBC 1000 contracts) to look for candles or do you think it is useful to watch several types/scales for a good reversal candle pattern near S/R?

Personally I use one chart scale and that's it. I'm watching 3 bonds, 1 currency, 3 oil, 2 gold, 4 indexes and 2 grain charts so I have to keep it simple. As for what kind of chart setting, that's up to you and your personal preference. There's a lot to be said of minute, volume and tick charts.

[Dinerotrader]

Originally Posted by brownsfan019 »

IMO you should perfect one way of trading (intraday or swing) before 'experimenting' with other setups. There's not much use in having a whole bunch of ideas that kind of work vs. 1 solid, reliable setup. If the goal is to make money, then you need to perfect that 1 strategy. From there you have to decide if you want to daytrade or swing and start there.

Right now I am working with several strategies, all intraday. Everything I work with is based on S/R so I am mostly in the mode right now of watching price action at S/R on daily charts as well as tick and VBC charts. Besides just taking a guess at a breakout or reversal at S/R I am hoping to identify something to give some statistical advantage to that guess. I guess this where some introduce moving averages, various indicators, candles, and price action patterns.
I have been trying to spend some time looking at how price reacts to very small scale S/R on a 1 tick charts to see if I can find some clues that take place before a breakout or reversal.

Anyway, I am working a lot on this stuff. We'll see if I can get to workable plan in 2009.

Thanks for your comments.