Attila the trader
Active member
- Messages
- 225
- Likes
- 27
Do candle stick patterns work better on daily charts than intra day ?
Do candle stick patterns work better on daily charts than intra day ?
- Thread starter Attila the trader
- Start date
- Watchers 13
Do they really actually work better? No. Markets are fractal so there's nothing inherently different about a daily chart vs an intra-day chart. It's just the ATR is bigger so you'd generally have bigger targets and bigger stop losses.
Do they work better for most people? Most likely Yes... but only because of how people perceive them. More time to analyze, more days for someone to have the position go in there favor, people tend to trade smaller sizing when trading daily's generally speaking so they are less stressed vs putting on a day trade and etc etc.
Do they work better for most people? Most likely Yes... but only because of how people perceive them. More time to analyze, more days for someone to have the position go in there favor, people tend to trade smaller sizing when trading daily's generally speaking so they are less stressed vs putting on a day trade and etc etc.
Well I am speaking of Stocks/Futures I don't trade forex, so we can't be disagreeing there. Even if candle patterns only work slightly more than they fail, still if you took every single one why would the Daily chart results be inherently better than a time, kase or etc chart that's comparable? And if those results aren't aren't drastically different, you could shave a little time off of the other charts and rinse and repeat.
In other words you'd have to tell me at what point do candle patterns lose there effectiveness? If the answer is they only really work on Daily charts, than that just isn't my experience at all and maybe we're using different candle patterns. If that's the case than I can't and won't claim you're incorrect, I can only state what I know to be true which is the candle pattern I use does not work more or less, simply by changing my chart.
I don't personally trade any of the shooting star, hammer hanging men or etc(I'd be surprised if these are truly better results only on Daily charts, but I don't know for a fact that why I conceded that).
While not my main thing I will sometimes trade engulfing bars / patterns, particularly useful if you already have something else that's giving you an edge on knowing if better odds for up or down. I have looked at Daily, Weekly, Monthly, Time (1,2,5,10,30,60,120,240 min), Momentum, Kase, Volume, Range and Tick charts and I have not seen any noticable different in what I do personally(which makes sense, since the markets are fractal).
At any rate I don't feel like getting in a debate regarding this. So, may not be replying much more if at all. Just sharing my experience, but again can really only speak to engulfing bars / patterns.
Candlestick patterns that rely on gaps between close and open are inherently unreliable on all types of intra-day charts and forex daily charts. In these cases there are no or very small, uncommon gaps, and only the weekend forex D1 gaps are due to a closed session.
I admit I don't find candlestick patterns highly reliable and I do not use them as entry signals. But as unreliable as they are in their own optimum contexts, I see them as even less reliable in different, inappropriate contexts. Nothing contentious there, I'm sure.
Atilla
Legendary member
- Messages
- 20,861
- Likes
- 4,037
Strange peeps referring to chart patterns as whether they work or not? What does work mean? I'm guessing at predicting market moves.
Candle sticks are no different to any other view of where price movement has been. They are historical view on price movement and that's all imo.
I would not refer to technical charts patterns as whether they work or not. No they do not work imo. They are merely a view on price movement.
What candle sticks do is give you an insight into market psychology between the bulls and bears over who won the battle on the day. They are loaded with information presented in a simple candlestick pattern with body and tails.
Bulkowski has done a lot of work looking at statistical probabilities on pattern breakouts worth looking at. However, as with all things nothing is 100% certain.
Candle sticks are no different to any other view of where price movement has been. They are historical view on price movement and that's all imo.
I would not refer to technical charts patterns as whether they work or not. No they do not work imo. They are merely a view on price movement.
What candle sticks do is give you an insight into market psychology between the bulls and bears over who won the battle on the day. They are loaded with information presented in a simple candlestick pattern with body and tails.
Bulkowski has done a lot of work looking at statistical probabilities on pattern breakouts worth looking at. However, as with all things nothing is 100% certain.
new_trader
Legendary member
- Messages
- 6,770
- Likes
- 1,656
👆This would be mostly my answer too.
A head and shoulders pattern is a head and shoulders pattern regardless of the time frame. The general rule is that what you forecast/project from the pattern is only valid on the time frame that it exists.
Attila the trader
Active member
- Messages
- 225
- Likes
- 27
there are scaners but they are paid (AFAIK) , if you find a good one inform me as well .
Nice level-headed post.
New traders sometimes have an idea that a chart pattern or candlestick pattern or indicator-driven set-up must have a colossal win rate to be worth trading. Worse, they sometimes assume that these things are almost cast-iron 100%fire-proof ways to enter a trade and make a profit.
They're not and they don't need to be.
It has to be realised that if you have a pattern or set-up that has only a 55% win rate and you can trade it at a r:r of only 1:1.5, you are going to do very well financially out of it. It will take you just over 200 trades to double your money. 200 trades is nothing: but its the 200 trades that make the money, not the win rate , not the r:r.
That's all the more reason why intra-day can potentially be more effective... you'll have more setups to take. I understand you've already stated the patterns you've looked into do not work as well or at all on other charts as the Daily. I will take you at your word on that.
However, I know factually the markets are fractal and I also know the pattern that I use, as well as other things I use do not become less effective just because I change the settings on my chart.
Out of curiosity do you not believe the markets are fractal?
To keep it simple I just mean NQ, ES futures. IE: Just because I change a 5 minute chart to a 5 minute and 1 second chart, isn't going to change the effectiveness of the strategy I am using nor would changing it to a 5 minute and 2 second chart change it. You're just viewing the information on a different time frame, it's not different information. Sure some people may be able to see it better, differently or able to parse the data better on certain charts, but that's the human / knowledge factor, not the chart.
Again, I am not challenging your personal experience on the Daily chart vs other time frames, I am just stating what I know to be factual and/or factual for myself.
My main drift was to point out that candlestick patterns reliant on common and significant close-to-open gaps are not directly transferrable into any charts for markets where there is no closed session. They may still work approximately and there is plenty of anecdotal evidence from winning traders to say so.
But it makes me laugh when traders confidently assert that a market movement will follow or did follow a specific and named candlestick pattern - which they clearly don't know cannot occur without at least one gap.
Attila the trader
Active member
- Messages
- 225
- Likes
- 27
no problem mate
