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Intra-day trading with Candlesticks

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aohx075

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Hi, I've been looking for some threads about using Candlesticks for intra-day trading on the FOREX market but couldn't find any so starting a new one. If there's an existing thread I'd be more than happy to be directed to it.

I was wondering if there's any scalpers using the candlestick patterns on 1min charts and how they find it.

I've been reading "Japanese Candlestick Charting Techniques" by Steve Nixon and just to test some of it's reversal patterns I was simulating the hammer/hanging man and engulfing patterns on the 1 min charts and my initial results were pretty bad! I would have lost quite a bit of money had I used those patterns. The examples/exhibits they use in the book seem to refer to monthly, weekly charts; are candlestick patterns are only useful for the long term trades and not intra-day trading?
 
aohx075 said:
Hi, I've been looking for some threads about using Candlesticks for intra-day trading on the FOREX market but couldn't find any so starting a new one. If there's an existing thread I'd be more than happy to be directed to it.

I was wondering if there's any scalpers using the candlestick patterns on 1min charts and how they find it.

I've been reading "Japanese Candlestick Charting Techniques" by Steve Nixon and just to test some of it's reversal patterns I was simulating the hammer/hanging man and engulfing patterns on the 1 min charts and my initial results were pretty bad! I would have lost quite a bit of money had I used those patterns. The examples/exhibits they use in the book seem to refer to monthly, weekly charts; are candlestick patterns are only useful for the long term trades and not intra-day trading?
Click to expand...

I recently switched over from using a line chart to a candle stick for 1min forex. So far im finding it better. I dont pay too much attention to the patterns however (maybe i should). I take notice of the hair on the top and bottom of the candles, if i see a big bear/bull candle with decent volume, i know the next candle will be the same (but with less volume).

So im liking it so far, and i dont think i will go back to using a line chart for 1min.

I dont take what is indicated to me as gospel however. when everything says the price should go a certain direction, it doesnt mean it will
 
Forget about matching what some dude has described as "classic" patterns to your market.

Learn the patterns of your market. The book of charts patterns is the second biggest scam in the industry, after FX leverage :(. Study your market not some perfectly backward fitting examples while the hundreds of others that fail have been ignored.
 
I've been monitoring the 1 minute intraday candlestick charts for my options trading.

Although I'm aware of the basics of candlesticks and see the patterns forming all the time I don't think they have much relevance at that level.

I do look for more conventional patterns as part of trying to interpret what's going on - looking for zones of congestion, top formations/continuation patterns, trend, support/resistance areas, etc.

I've also been trying to interpret volume using some of the VSA concepts that have been discussed on here - I've been finding that very useful.

The other thing is watching the actual trades go through and seeing whats driving volume/price as the bars play out. (e.g. was price in a bar driven up by retractions and then hits on the bid, sellers pushing a thin buy depth down then buying up etc. there's a million variations).

Volume is definitely a key indicator as to what is really going on - and going out to the 5 minute and 30 minute charts to check any viewpoints developed on the 1 minute charts is also helpful.

The real art, which I definitely haven't mastered but am getting some insight into, is to trade on what you see, when you see it, without being clouded by seeing what you are hoping to see, or holding off on taking action on an event in the hope that things will change. (you will probably hold off until just before things actually are about to change - at which point your emotional involvement clouds the objective interpretation, making you miss the signals that would have given a re-entry/exit had you acted on the first signals).

I didn't realise I'd start to find it so interesting watching intraday price action - although I'm only at the early stages, some of the things that the more experienced people on here speak about are starting to click into place a bit lately - areas like the trading mindset, interpretation of volume, options theory and practice etc.

I'm not sure options are the ideal vehicle for day trading/short term trading - though options pricing varies enormously throughout any given day so why not I suppose. You also get to trade volatility as well as price which adds an interesting dimension to it.
 
Thanks for the feedback guys~

I guess from what you guys have been saying and my initial observation of candlestick pattern matching is that it possibly isn't the best tool to use for intra-day and scalping trades. I'll keep an open mind about this and finish the rest of this book to see if there's at least one candlestick pattern that might be useful.
 
I pretty much only use & look for 2 candle stick patterns as in the chart - both exhaustion type formations - large move followed by flattening. 3 candles to confirm. Combined with the percentage change (day trading) and I usually get the day low or highs after such moves.
 

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Hi,

Been experimenting using the shorter time frame (5,15,30) charts with candlesticks, moving average and s&r. From my observations, the 5 min charts aren't very reliable. It also really depends on what sort of success rate you are looking to achieve.
 
As far as intraday, I would say the best candlestick use is just looking for long wicks with big volume after a trend and for a turn, no matter how minor.

Real art is milking the trend for all it's worth once the turn comes.

Oh and never buy the top, or sell the bottom, of a long green or red candle. Dangerous game.
 
Hi all.

Well my answer is yes i do !!

Candle or bar charts using 5min is what i use to exit my trade, after going long or short..
I have made a specific set or rules for this type of trading.. I find it works well,
Mostly on index's or fx....

I enter a trade from pattern breaks, then stick to my set of rules.. works for me. :)
 
Gday guys,

Which charting programs do you use etc for live intraday charts.I only use incredible charts which is delayed and only shows daily candles.

I would be really interested in looking at some live candlestick charts.

Any recommendations much appreciated.

cheers
 
Trembling Hand said:
I think the point is don't chase strength or large extended runs.
Click to expand...


Correct imo..... Never chase !! .. what you must know ( before you take a trade ) is where the current run will end.. At Support or resistance !!! thats what counts and thats where some of the best setups come from the end of a run.

Thats why using intra day charts looking back over some days to weeks, you can clearly see (some) supps and resist where the mkt will turn.
 
I do as well.
I found intraday trading or to analyse a timeframe, it better with a candlestick charts. It makes it pretty easy and comfortable to study about the resistances and supports.
But on the other hand if you took the day data, represented it with candlesticks of say 30 minutes interval, starting @ 10.00 AM and compare that to a chart started a 9:55 AM or 10:10 AM, you will get very dissimilar candles forming since individual H,L,C,O may drop in different time intervals. This is factual in spite of the time interval chosen.
now what to say friends:banghead:
 
Heikin-Ashi candlesticks , are they better for short time intra-day trade decisions in volatile chop for less false signals '
:rolleyes:


Heikin-Ashi candles are different and each candle is calculated and plotted using some information from the previous candle:

1- Close price: the close price in a Heikin-Ashi candle is the average of open, close, high and low price.
2- Open price: the open price in a Heikin-Ashi candle is the average of the open and close of the previous candle.
3- High price: the high price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the highest value.
4- Low price: the high price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the lowest value.
 

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