Here is why I think candlestick patterns have no value: with example

This is a discussion on Here is why I think candlestick patterns have no value: with example within the Technical Analysis forums, part of the Methods category; Originally Posted by dbphoenix There appears to have been a delay in this post, perhaps because it's your first. And ...

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Old Nov 3, 2016, 1:40pm   #25
 
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Originally Posted by dbphoenix View Post
There appears to have been a delay in this post, perhaps because it's your first. And it's not exactly on-topic, but I did mention P&F, so I'll answer as briefly as I can.

I don't use P&F because it doesn't tell me anything I don't already know and because it's not nearly fast enough. As for measuring the distance of a successful move, I haven't seen any rigorous evidence that it is able to do so, but that doesn't mean the evidence doesn't exist.

Keep in mind, though, that some people love it, and if it meets their needs, then it certainly merits investigation. I suggest you begin with du Plessis.
Ok, thanks for the info.

The other day I've read this document https://www.fidelity.com/bin-public/...ointFigure.pdf which states that some patterns in p&f have 91% success rate, what do you think about it? Scam or not?
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Old Nov 3, 2016, 2:05pm   #26
 
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Ok, thanks for the info.

The other day I've read this document https://www.fidelity.com/bin-public/...ointFigure.pdf which states that some patterns in p&f have 91% success rate, what do you think about it? Scam or not?
I don't want to appear rude, but I really don't care enough about it to evaluate the research design, though if it's like most, there are probably so many holes in it that whatever conclusions are drawn may be baseless. I'd ask someone who really likes P&F and is successful with it, though how you'll know whether or not they are truly successful with it is another matter.

OTOH, if you're interested in it chiefly because you're disillusioned about candles, you may find my Wyckoff thread interesting. It's a strictly no-frills approach to trading.
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Old Nov 3, 2016, 2:26pm   #27
 
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Originally Posted by dbphoenix View Post
I don't want to appear rude, but I really don't care enough about it to evaluate the research design, though if it's like most, there are probably so many holes in it that whatever conclusions are drawn may be baseless. I'd ask someone who really likes P&F and is successful with it, though how you'll know whether or not they are truly successful with it is another matter.

OTOH, if you're interested in it chiefly because you're disillusioned about candles, you may find my Wyckoff thread interesting. It's a strictly no-frills approach to trading.
Ok, thanks.
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Old Nov 3, 2016, 3:27pm   #28
 
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Originally Posted by dbphoenix View Post
There appears to have been a delay in this post, perhaps because it's your first. And it's not exactly on-topic, but I did mention P&F, so I'll answer as briefly as I can.

I don't use P&F because it doesn't tell me anything I don't already know and because it's not nearly fast enough. As for measuring the distance of a successful move, I haven't seen any rigorous evidence that it is able to do so, but that doesn't mean the evidence doesn't exist.

Keep in mind, though, that some people love it, and if it meets their needs, then it certainly merits investigation. I suggest you begin with du Plessis.
Thank you DB. I would take a look on du Plessis. Your talk about the continuity of price does help me a lot in understanding Wyckoff.
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Old Nov 3, 2016, 3:29pm   #29
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So you entered based on the shape of the candlestick (I assume the chart is 4h), but that shape just happened to appear to you because you are in UK. If you were let's say in Spain there would be 1h offset, therefore the 4h candlestick would look different (not sure how much different, but is possible to check). So you would still make that decision? If would be different I don't think you would do the same. I'm not saying you are wrong, I'm just asking you the question. What do you think?

I don't really have proof that candlestick patterns are worthless, but I would like to see what are the win/loss ratios of people using them. Notice that money management and time plays a big role (ex.: your entry might be really bad but after a while turns your way and you win money). Either way I would like to know if you are happy to present some stats of your trades (win/loss ratio, average profit per trade, trades per day, average trade time and similar). Also let us know if you just do TA on candlestick or you take in account something else.

Thanks
But the key being - it is relevant to him, and him only as its his own interpretation of the information. If there is no information deemed of value it simply means no trade, so you may take a trade and he may not because you both have different "images" of the information. What you need is a way of understanding the story; how best can you interpret the meaning etc?. This is only one piece of the jig saw, so best not to get too hung up over it, or you will lose focus on all other important factors to being a consistent trader. (Not saying you are not - just in general)

Only my opinion of course.

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Old Nov 3, 2016, 3:39pm   #30
 
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Thank you DB. I would take a look on du Plessis. Your talk about the continuity of price does help me a lot in understanding Wyckoff.
If you're interested in Wyckoff, you may prefer de Villiers over du Plessis since de Villiers started the whole thing at about the same time that Wyckoff and Livermore were active.
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Old Nov 3, 2016, 4:10pm   #31
 
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If you're interested in Wyckoff, you may prefer de Villiers over du Plessis since de Villiers started the whole thing at about the same time that Wyckoff and Livermore were active.
I did read de Villiers books and also alexander Wheelan's, but all their works emphasize on patterns recognition. You mentioned market auction theory in Traders Laboratory and advised to read market profile books, but some of their concepts do not make sense to me, so recently I come back to PnF to see whether there is a way to differentiate some behaviours on bar charts.
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Old Nov 3, 2016, 4:24pm   #32
 
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I did read de Villiers books and also alexander Wheelan's, but all their works emphasize on patterns recognition. You mentioned market auction theory in Traders Laboratory and advised to read market profile books, but some of their concepts do not make sense to me, so recently I come back to PnF to see whether there is a way to differentiate some behaviours on bar charts.
I doubt that I ever advised reading Market Profile books. As to interpreting behavior on P&F charts, I can't help you there. However, I've written extensively on interpreting behavior on bar charts, none of which has anything to do with this thread. The following are a start:

The Wyckoff Method

Trading Price

The Straight Line Approach

SLAyers' Notes

The latter two are long and you can skip a lot. If you've already read them, it's time to open up a journal and begin the real work. Trading Price is my attempt to consolidate what I consider to be most important into something that's easily digestible. It's chief value may lie in the fact that it's brief.
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