# Realtime candlestick patterns to learn from



## It's Snake Pliskin (13 September 2010)

I would like to see some realtime candlestick pattern recognition from practitioners. If you want to show a candlestick pattern that has just formed, or is looking to form why not post it to show what it is and how it is what it is.


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## Synergy (13 September 2010)

I don't really use candle sticks to trade, but I'm enjoying watching what LOM is doing. Very clean lines makes for pretty drawings.


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## katerina (14 September 2010)

Trading candles can be a very hit or miss affair as they dont account for volume.  You'll find there are times when small cap stocks (usually) form long lines (red or green) on little volume, so you need to be careful.  Looking at the LOM chart we see the tops of the candles give a clear picture of where buyers will stop buying.  Once the price goes through this point then this is a buy signal - see the chart.  The old resistance (tops of candles) could then be your stop loss.  Note that if you bought after the Aug 2, trigger you wouldn't be stopped out by the steep rise and decline.

Its not a great stock to look at candles though as there arent a lot of tops and tails - there is a lot of solid body


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## Synergy (15 September 2010)

Nice first post Katerina, what are your thoughts on LOM after today?

Today saw a breakdown of the pennant patternt (if that's what it ever was) with a low volume spike down to the rising support line, also touching the old horizontal resistance. As can be seen from the yellow lines, touches of the rising support in the past have led to a steep rise in price. The low volume dip to support followed by a recovery is usually a positive signal.

Tomorrow should tell if that was the case.


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## Gringotts Bank (15 September 2010)

equivolume chart style can highlight the interaction between price and volume, making your candles less hit and miss.


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## tech/a (15 September 2010)

Gringotts Bank said:


> equivolume chart style can highlight the interaction between price and volume, making your candles less hit and miss.




Could you give an example of how this increases the/a Candlestick signals accuracy.
In realtime rather than hindsite---hindsites easy.


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## Synergy (15 September 2010)

Are there any online chart sites that allow you to view by volume rather than time?

bigcharts has a volume by price feature which i find useful.


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## tech/a (15 September 2010)

Here is an example of a candlestick volume chart.


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## It's Snake Pliskin (15 September 2010)

Interesting posts guys. 
I would like to learn the traditional patterns without recommendations and targets etc. Volume is a separate indicator that one could tie in but the patterns are the focus of this thread. Nuances etc are good to cover in the thread and other elements could be listed too, just not a discussion on volume. I'll try to show some examples as I see them too.


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## tech/a (15 September 2010)

When it all boils down candlesticks are simply another way to display Open High Low and Close Relative to Range. In both singular and group patterns.
Like all charting confluence of indicators can help with the accuracy of reading the chart.
Stand alone is indicative at best.---as is the case with all chart reading methods. Isolating ANY method will disappoint.
In my view.


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## Gringotts Bank (15 September 2010)

Discretionary trading is very visual in nature (chart or market depth), so an equivolume chart gives a nice perspective where both price and volume are blended into the one visual cue, rather than two.


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## It's Snake Pliskin (15 September 2010)

tech/a said:


> When it all boils down candlesticks are simply another way to display Open High Low and Close Relative to Range. In both singular and group patterns.
> Like all charting confluence of indicators can help with the accuracy of reading the chart.
> Stand alone is indicative at best.---as is the case with all chart reading methods. Isolating ANY method will disappoint.
> In my view.



There are candlestick patterns like "hammers" which are not covered as hammers in other charts. But other charts can read the same effect though in a different look. So candlesticks alone or candlesticks vs bar charts etc is not what this thread is about - just the terminology and identification of the candlestick patterns. 

the thread is inteneded to isolate the candlestick pattens. Not to highlight any trading methodology incorporating other indicators. That could be a secondary comment after a pattern is talked about. 

I agree with the standalone coment.


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## tech/a (15 September 2010)

Gringotts Bank said:


> Discretionary trading is very visual in nature (chart or market depth), so an equivolume chart gives a nice perspective where both price and volume are blended into the one visual cue, rather than two.




So from a visual stand point how would you read the chart (Candlevolume) above going forward? What is the perspective you see?


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## Gringotts Bank (16 September 2010)

tech/a said:


> So from a visual stand point how would you read the chart (Candlevolume) above going forward? What is the perspective you see?




Well it's a big wide green candle, which would normally be bullish.  However if you take into account the fact that you have probably trawled through a million equivolume charts just to find one which looks bullish then suddenly drops away, well I'd short this stock.  So my intuition would override the bullish signal.  I'm reading you, more than the chart, since I know you have a chip on your shoulder and would do anything to prove me wrong on some point.  How's that for discretionary!


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## tech/a (16 September 2010)

Gringotts Bank said:


> Well it's a big wide green candle, which would normally be bullish.  However if you take into account the fact that you have probably trawled through a million equivolume charts just to find one which looks bullish then suddenly drops away, well I'd short this stock.  So my intuition would override the bullish signal.  I'm reading you, more than the chart, since I know you have a chip on your shoulder and would do anything to prove me wrong on some point.  How's that for discretionary!




Excellent.
Most people equate high volume with strength without relating it to other factors in a chart.High volume (Read un usually high) is very often a sign of weakness as you correctly pointed out here in this chart. In fact a rising price in average volume is likely to sustain gains.
I was and* am making the point* that taking ANY signal from ANY form of analysis in isolation fraught with danger.
Plus volume is often read incorrectly.--Charts for that matter!
As for a chip---nooooo! you misunderstand my intentions---hopefully this makes it a little clearer.


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## explod (16 September 2010)

tech/a said:


> Excellent.
> Most people equate high volume with strength without relating it to other factors in a chart.High volume (Read un usually high) is very often a sign of weakness as you correctly pointed out here in this chart. In fact a rising price in average volume is likely to sustain gains.
> I was and* am making the point* that taking ANY signal from ANY form of analysis in isolation fraught with danger.
> Plus volume is often read incorrectly.--Charts for that matter!
> As for a chip---nooooo! you misunderstand my intentions---hopefully this makes it a little clearer.




Well put tech.  The shape and place of a candle on varying volumes can be a very powerful indicator when considered together.  

Louise Bedford's "The secret of Candlestick Charting" Wrightbooks 2000, (check our ASF bookshop) gave me a very good grounding when I started out on shorter term trading.


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## Trend Hunter (16 September 2010)

Wow! This is a really interesting post guys.
Combining volume with your candlesticks patterns is definitely the way to go IMO. 

Although I don't use Candlestick as such for position entry myself, I do use them for extra feedback for my own trading system, to define Support and Resistance, to guage who is in control of the market, and potential reversal points etc. Its amazing sometimes, the little clues that the market leaves behind if you know what to look for.

I have completed Steve Nisons Homestudy (the guy who translated Japanesse Candlesticks from the Japanesse, and brought it to the Western World), which I do recommend for anyone wanting to learn from a guru.

He says that candlesticks should not be traded as a system on their own, but in conjunction with Western Technicals. For me, when your trying to figure out whats next on the right side of the chart, the more feedback you get from the chart the better, and candlestick certainly do that.


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