Candlesticks with combined indicator

[colin848926]

Hi

Brand new to this forum and trading

Recently been trying to trade via spread betting/purchasing shares.

I understand a little about fundamentals - looking at debt, pre tax profits etc but would like to time the market better for entry/exit points with TA.

I was thinking of using candlestick patterns to identify trend changes combined with two moving averages.

Do I need to be using another indicator (if so which) to re-inforce the candlesticks?

Regarding exit points, am I better to use support/resistance levels of fib retracements?

Any help most welcome!


Colin

 

[FrankP]

Hi.

I am new too but I think adding next indicator would not help. When exiting support levels are good.

 

[tomorton]

Hi

Brand new to this forum and trading

Recently been trying to trade via spread betting/purchasing shares.

I understand a little about fundamentals - looking at debt, pre tax profits etc but would like to time the market better for entry/exit points with TA.

I was thinking of using candlestick patterns to identify trend changes combined with two moving averages.

Do I need to be using another indicator (if so which) to re-inforce the candlesticks?

Regarding exit points, am I better to use support/resistance levels of fib retracements?

Any help most welcome!


Colin

I don't much trust indicators, using a fairly mechanical price action based sysem to trigger entries. However, for stops, exits or scaling out levels, s/r and Fib are good, but it is always better when s/r and Fib retracement values overlay each other: maybe also with big round number values on the instrument such as century 00 or millennium 000 figures, and a coincidence with short and long MAs. See inthemoneystocks.com on Youtube - I think they follow an approach pretty similar to what you are proposing.

 

[TAjammy]

you should check out trader_dante's price action trading thread if that's what you're into, another option is to type ' oztrader 'into youtube, he teaches price action on forex that's how i learned about it and once you know it it sticks in your head tbh


- how could i forget google ' james16 ' and read that entire thread, every trader trading price action should read that

 

[colin848926]

Hi

Thanks for the replies

Basically looking for a way of identifying trend reversals which I can use to enter trades that I have already selected. I am hoping to trade the trend. Would the candlestick patterns help me to identify these, or would I be better to use something else?

Planning on using moving averages as exit points. Or would I be better to use fib/support and resistance levels

Would this work?

Colin

 

[tomorton]

Colin - Anticipating reversals is one of the hardest TA skills, and some would argue it is only theoretically possible. Certainly, getting short into a rising instrument or long into a falling one are rapid routes to a big loss.

Price action indicates direction when trend has already changed: lagging indicators like MAs and MACD offer confirmation of this. RSI and momentum-based indicators are leading indicators and suggest when prices are approaching overbought/oversold levels, making a reversal likely (but not certain at any given point in time). But I would suggest trend-following until you are very very good, i.e. your profits, not capital, will then fund the costs of learning how to anticipate reversals. Various swing trading techniques will do well for getting into new trends.

 

[colin848926]

Hi tomorton

Thanks for the reply

I have recently been on a naked trading course by Robbie Burns - great for a beginner. It has really helped my selection method, and the idea is that you follow the trend.

However, I am finding that sometimes I am getting into the trend too late. Is theer any way of working out when a trend is about to become exhausted?

Similarly, although not mentioned on the course, I wondered about the use of candlesticks. What do you think regarding these?

I am looking to be in trades for days to several months.

Colin

 

[TAjammy]

what many people do is trade retracements of trends using reversal candlesticks, for example in an uptrend price may pull back to the 20,20 or 200 EMAA, people often look for a reversal candle like a pin bar piercing throughthe MA and rejecting lower prices-a long signal

 

[tomorton]

Hi Colin - I just can't think its a good way to start trading, anticipating reversals - for a trend that defies all fundamental analysis, yet continues to kill the shorters, see the FTSE100 from 13/07. A trend has only reversed once it has reversed, otherwise, it might simply be a congestion before continuing in the same direction. If your entries are too close to trend end points, maybe you're only trading weak trends on short time frames: it would be hard to be late into the 13/07 FTSE uptrend.

 

[TAjammy]

Take it from me, you can look back at some of my very early posts- i made a thread on candlestick reversals on low timeframes (5min etc) , the fact of the matter is that they fail most of the time. You have to take the signals where they make sense, i.e. take a pin bar at support/resistance and not just in the middle of a trading range

 

[tomorton]

Hi Colin - I can;t get the stupid message facility to work.

Trading is an unending journey that has many routes - I don't believe its possible to select one from the choices available before setting off, you have to travel the road. Its how you travel, not how soon you can arrive.

All sounds a bit zen but at heart there is only one way to fail and that is to get knocked out by losses. The idea of trading is to keep losses small, not to win big. All the usual approaches will help - TA courses, read the standards on trading techniques and money management, paper trade, backtest, refine your system, backtest some more, paper trade again, and then trade small until consistent. The best entry though will be eroded by poor money management: take small losses quickly at the first point where the market had no other option but to continue the wrong way. No entry without an exit point already in sight.

Easy way to start is to trade long time frames - whole days at first. Allows much deeper TA thought and observations. Also allows you to observe your own reactions and feelings as a position goes into the red. Only if you can do this should you go intra-day. This forum is very good source of free advice but keep a pinch of salt handy - some people more interested in the video game fun approach than actually controlling risk: eventually they get killed.

Good luck to us all.

 

[colin848926]

Thanks for the reply
tomorton

Will let you know how the journey goes!!!

Colin