Every candle tells a story...

[JTrader]

Maybe. Thats probably a worthwhile exercise also.

 

[options]

This is one way of 'seeing' what is happening inside the bar.

 

[JTrader]

Compare the two.....

Yes, interesting. To be fair to the line chart, you can actually see the individual candle like segments in it. Though there's still no high & low (wick) to work from.



However, if i could see the same things without the high and low - from a line chart

AND YET

In the candlestick chart, I feel that i do not need to see how a candle closed in relation to the open - whether above or below - as the high and low information is enough to go off...



...What would this tell me?.....probably that open/close info is enough, and that i can fairly easily automatically recognise what direction a candle closed in on both candlestick (with up & down candles all 1 colour) and line charts.

I think i prefer the candlestick chart though, as when candles are flatish, its perhaps easier to see how the candle closed.....But, you can zoom into whatever magnification you want in Metatrader, so this would illiminate this issue anyway.


EDIT: Actually, i do presently find the candlestick chart much easier to look at than the line chart though after a quick comparison of my own. A candle tells me more info, & is quicker to interpret. Thats not to say I couldn't use only a line chart, but not to the same standard right now.

 

[Chorlton]

JT. I'll give you another little trick.

Try having the candles the same colour. use a 'neutral' colour. ie not 'red' (down) 'blue' (up)

You can go back to colours later.

Hello Options,

Can I ask why you suggested this? I'm a little confused now ...

Thanks,

Chorlton

 

[options]

Hello Options,

Can I ask why you suggested this? I'm a little confused now ...

Thanks,

Chorlton

What having the candles the same colour?

So you don't pre-judge direction.

Using a neutral colour?

Your brain is pre colour coded. At least now it is. blue/green etc up. Red/black etc down.

 

[Chorlton]

What having the candles the same colour?

So you don't pre-judge direction.

Using a neutral colour?

Your brain is pre colour coded. At least now it is. blue/green etc up. Red/black etc down.

But if you're going to colour them all the same then surely there is little difference in using them compared to traditional bars?

I always felt one of the reasons why they were so popular was that they could convey price information easier than bars, and one of the main reasons for this was the clear difference in colour.

However, your reasoning for changing them to a neutral colour is spot-on!!! I agree that we are "pre-conditioned" to see certain things..... Good Point.

 

[JTrader]

I've read various posters comments about how they can at times read the price action on a chart, like they could a piece of music.

So. this afternoon, I decided to really eyeball some candlestick charts, from left to right, and see what each candle told me, and how that message related to what followed.

I tried this on a few different instruments and timeframe.

What i have found is that my predictive interpretations of what each candle told me, based on the OHLC, and its relation to the previous and very recent candles, consistently unfolded on the following candles.

This would be extremely useful a skill, to use in real-time, as it would allow you to consistently and successfully, closely track the price action (trend and turns) for any given instrument.

Have a go for yourself. Just select any candlestick chart. Start at the left, and candle by candle work to the right. Think carefully about what each completed candle is telling you about what is happening in terms of the price, through the OHLC levels, and its relation to the OHLC of recently completed candles.

Try drawing up a few strict either/or criteria that must be met, for you to then enter or SAR at the open of the next candle (after a criteria meeting candle closes), that would have consistently allowed you to make a profit.........If this is possible, you are onto a winner!

Busy with the details of this today in order to end up with the most consistent methodology - hopefully. So not a lot more to say on it for now...

Feel free to have a go for yourselfs, you might be surprised by what you see, if you look & listen close enough!

Not being afraid to add a few straight lines (trendlines) in order to track the local & longer term swings & turns in the candles movements, and add further logic & context to what the candles are saying to you, can also be beneficial...
Personally, i prefer to draw all my lines from the candle bodies (open/close) and not the wicks.

 

[barjon]

hi jt,

hope you'll excuse me for following your lead http://www.trade2win.com/boards/candlesticks/38088-wot-happened-next-revisited.html but i thought what you're doing is great.

good trading

jon

 

[options]

.

.

But if you're going to colour them all the same then surely there is little difference in using them compared to traditional bars?

Well, the candle is supposedly easier to read. The line is even easier to read if you use it as sup and res levels and trade breaks of them. It will only fall down (the line) using this method where the pin bar comes in. And that is a powerful bar.

I always felt one of the reasons why they were so popular was that they could convey price information easier than bars, and one of the main reasons for this was the clear difference in colour.

I posted something on here a few days/weeks back, (can't even remember where now)
about the difference between two charts of the same instrument from 2 different sb providers, both using the same charts. (IT financial. IG and CMC) the last bar on both charts... One showed red, one showed blue. Both entirely different candles as well!
So dependant on which chart you were using...

Price movement that you see on your chart is an illusion. Most indicators that people follow are an illusion. If you are trading by just watching the bars/candles/line on your chart you are trading an illusion that is being fed to you.

The price (Which is the only thing you can trust to trade from), has already moved. (Hence your price blip against you JT) It even says on the chart that prices are indicative.

I am talking very short time frames, on longer ones it is not so apparant, but you do need deeper pockets. (Not for me).
So only price counts.

Having said all that. I do have indicators on my chart, I do have a bottom indicator and my price bars are 2 different colours, But I do not use them as most people would. I do not see them as most people do. Most of the time I don't see them. I trade on price action. That tells me when to enter.
When it all gets a bit too much, I go back to a clean chart. Only price bars.

The holy grail does exist...But you have to find it alone. It will only work for you. It is yours and yours alone.
If someone gave 'The Grail' to you. You would stick it in a cupboard after a few days the first time it had a hiccup and carry on your own way. (This is not to you Chorlton, but to everyone).

No matter what method and what tools you use to trade. Price will point the way.
If you are using an indicator that is right only 60% of the time. Why are you still using it?

Those trades you got in and they went against you straight away. What was your entry criteria?
I bet an indicator of some sort was in play.

You will get hiccups just by using price, but they will get less and less and your entries will get better and better.


However, your reasoning for changing them to a neutral colour is spot-on!!! I agree that we are "pre-conditioned" to see certain things..... Good Point.

 

[wasp]

The holy grail does exist...But you have to find it alone. It will only work for you. It is yours and yours alone.

So very true.

 

[JTrader]

hi jt,

hope you'll excuse me for following your lead http://www.trade2win.com/boards/candlesticks/38088-wot-happened-next-revisited.html but i thought what you're doing is great.

good trading

jon

Cheers, I'll have a look.

And i haven't even posted a screenshot yet, lol!

Its pretty simple logical stuff really what I'm formulating. It has to be, really, for me. Certainly not like I'm inventing the wheel!

Perhaps posting lots of screenshots etc. is not the way to go though. Although i thhink they may be helpful for indicative reasons. Like options says, one mans holy grail won't work for the next, you have to find your own.

Reminds me of a good quote -
To lead people, walk beside them ... As for the best leaders, the people do not notice their existence. The next best, the people honor and praise. The next, the people fear; and the next, the people hate ... When the best leader's work is done the people say, 'We did it ourselves! — Lao-tsu

...Not that I will try or want to set myself up as a guru, far from it! (and its a bit late for that lol!) and i prefer to keep the exact workings of my methods close to me. There's no point being exact anyway, as discretion plays a role, and they can be changed and over-ridden, and will not necessarily sit comfortably with the next person.....My point is, by spreading ideas & directions, even without exact details can lead to others finding their own successful yet slightly different path, all by themselves off their own back!

 

[JTrader]

For me, there are currently 3-4 things to look out for relating to what this candle might do in relation to the previous candle/s.

The low will be higher or lower or equal to the previous low.
The high will be higher or lower or equal to the previous high.
This candle may close above or below or equal to the previous close.
And this candle will either close up or down, or level with its open price.