Free Candle Counting Indicator

This is a discussion on Free Candle Counting Indicator within the Forex forums, part of the Markets category; Hey T2W, I've created a candle counting indicator for MT4. You enter in the 'barscounted' and it counts the last ...

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Old Jul 31, 2010, 6:58am   #1
 
lbranjord's Avatar
Joined May 2008
Free Candle Counting Indicator

Hey T2W,

I've created a candle counting indicator for MT4. You enter in the 'barscounted' and it counts the last bearish/bullish bars for you.

This indicator also reads patterns of 3. If you have a Bullish bar followed by a Bearish bar for instance, it tells you the percentage of the time the 3rd bar was bullish & bearish in recent history (whatever barscounted value you gave it).

It's tricky to explain but very plain and simple once you see it.

I don't think candle counting statistics have groundbreaking relevance or anything, but I don't doubt it could be useful in creating a trading strategy.

Check it out! Thanks
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Old Aug 1, 2010, 12:10am   #2
 
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Re: Free Candle Counting Indicator

Surely candle counting is akin to 'gamblers fallacy'. If I toss a coin nine times and nine tails come out in a row then the chance that a head will come out next is higher. Gamblers fallacy. I tried to implement a similar strategy on roulette, red and black counting using a Martingale betting strategy. As you can imagine it didn't work. I should imagine that candle counting is the same. If there are three bullish bars then chances are that the next bar will be bearish is higher, clap trap.

Not to dismiss your coding skills, just to say that I can't really see it having any relevance to any system someone could write.
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Old Aug 1, 2010, 1:07am   #3
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Re: Free Candle Counting Indicator

Quote:
Originally Posted by Soloquan View Post
Surely candle counting is akin to 'gamblers fallacy'. If I toss a coin nine times and nine tails come out in a row then the chance that a head will come out next is higher. Gamblers fallacy. I tried to implement a similar strategy on roulette, red and black counting using a Martingale betting strategy. As you can imagine it didn't work. I should imagine that candle counting is the same. If there are three bullish bars then chances are that the next bar will be bearish is higher, clap trap.

Not to dismiss your coding skills, just to say that I can't really see it having any relevance to any system someone could write.
I disagree. Previous coin tosses do no affect the next coin toss because there is no memory effect, but candles/bars are created by REAL humans buying and selling. Trading is affected by fear, emotion, and limit of funds. When any or all of those is exhausted then you get a reverse bar/candle or support and resistance zones. There is no such thing as an "exhausted" coin toss.

I'm don't know how relevant a candle counting strategy may be to a trader, but it's not the same as the gambler's fallacy.

Applying gambling methods and gambler's fallacy to trading and vice versa is an very interesting topic though.

Peter
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Old Aug 1, 2010, 4:36am   #4
 
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Joined May 2008
Re: Free Candle Counting Indicator

lbranjord started this thread I agree with Wackyman, but I don't necessarily disagree with Soloquan.

As a trader, when I see a lineup of three bars, I do take into account what happened the last time a situation comparable to this occured. I don't trade based on that, but I think overall there is a bias there. I've always been interested in proving/disproving this.

Step two is to create an Expert Advisor that takes 3-5 bar scenarios and stores them in an array, then compares their accuracy in a forward test. Each unique entry will be remembered and taken into account to attempt to predict future outcomes. Also, old entries will be forgotten as trends in these bar patterns may come and go with time..

I have always been curious about this, so I'm not trying to lead newbies astray, but I must prove it to myself so I can let it go. This indicator is for those who are curious about the same thing and will hopefully save them time in testing their conjectures.

Thanks for the posts, I've often pondered the things you both said.
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Old Oct 6, 2010, 8:49am   #5
 
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Lightbulb Re: Free Candle Counting Indicator

There are many pattern like that that have high probability for short term gains
you must filter your results like :candle 1 [10] pips candle 2 [12]pips candle 3 [18] pips
all positive candles your in an uptrend and the 4th candle breaks the high of the 3rd candle
go long for 10 pips.. why not its high probability if the 2nd candle was 18 pips and the 3rd 12 pips i would not enter.
i only trade the 4hr and daily so results may very

Last edited by q_import; Oct 6, 2010 at 9:02am.
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