Intra-day trading with Candlesticks

nizar · 22 February 2009

Bobby said:
What no response ? guess knowledge of this form ( candlestick ) is limited :

Bobby, can you show us a chart using Heikin-Ashi candlesticks?
Never heard of them.

skc · 23 February 2009

Candle sticks were originally invented by some rice merchant/trader in Japan some hundreds of years ago. He was able to gain an edge from trading predominantly from his information system (employing heaps of people relaying price messages over long distances), which he recorded using candle sticks. There is a wikipedia entry somewhere about his story. My question is, how applicable is this scenario compared with the modern day markets, using 1-minute candles?

It seems to me one of the key tenants of candle stick is the closing price. For short timeframe candles, there is a lot less significance in the close price. Do people really reassess their positions spot on at the end of every minute? If you were to shift your charts and plot 1 minute candles from say 10:00:30 to 10:01:30, you will get a very different looking chart. It may throw up completely different signals, but how is this intra-day chart any less valid than the one produced using 10:00:00 to 10:01:00 candles?

Trembling Hand · 23 February 2009

Its not all about closing price. Its about Current price. And I don't think its about 1 individual candle but where it is compared to the ones before it. So I don't think it would make much diff if your candle started at 30 sec instead of 00 secs.

But having said that one of my most helpful tools is a 1 min count down timer on my charts.

Example here,

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2008/02/painting-a-pict.html

Bobby · 23 February 2009

nizar said:
Bobby, can you show us a chart using Heikin-Ashi candlesticks?
Never heard of them.

If you scroll down on this link there is an example next to normal candlesticks.

http://www.weboma.com/what-is-heikin-ashi-and-how-to-trade-with-it/

investorpaul · 23 February 2009

Bobby said:
If you scroll down on this link there is an example next to normal candlesticks.

http://www.weboma.com/what-is-heikin-ashi-and-how-to-trade-with-it/

Interesting how it calculates the open, close, etc. The thing I dont like is that you lose one of the shadows, which I think are an important component of a candle stick.

I can however see why some people would like to trade with them

motorway · 23 February 2009

Bobby said:
If you scroll down on this link there is an example next to normal candlesticks.

http://www.weboma.com/what-is-heikin-ashi-and-how-to-trade-with-it/

This is the most important thing to know about them

So a Heikin-Ashi chart is slower than a candlestick chart and its signals are delayed (like when we use moving averages on our chart and trade according to them).

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

Problem with all linear ( clock time ) representations

That is why non linear that do not cause such distortion are so important

hekin-ashi is linear and a moving average as well

A non linear method
will create discrete intervals of Volume or price movements

and not fixed intervals of a non optimised time movement

ultimately the flow of transactions = tape reading

examples

range bars
volume bars
renko
Point and figure

You know it’s true – some days are more important than others. Yet, the charts on which most traders rely make it difficult to see. That’s because time-based charts add a fixed amount for each period. For example, a daily chart adds the same amount of horizontal space every day. It doesn’t matter whether there was a lot of news or no news, whether it was a volatile day or a dull day – the chart adds the same amount of data. That’s true of all time-based charts, whether they’re one-minute, daily or monthly charts.

motorway

motorway · 23 February 2009

The top or bottom has a fixed location on the tape

Yet on time based charts it depends on the time interval

BHP lower boxes are waiting why they are filling with volume
nothing changes until it does

The bottom does not move
or change relation with anything
it just IS.

motorway

Bobby · 23 February 2009

Gee' so interesting those posts from TH & Motorway .

Stuff trading off time based charts , they do have linear distortion , also the traps shown by TH as one minute bar is forming ! 60 seconds is a long time .

Could just trade price (SPI ) watching live tick & looking at the XFL screen to see what color is winning ( red or green ) ,

acetrader · 1 March 2009

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?

Forget those patterns of candlestick. They were for the dumbest student of the ancient rice trading guru in Japan.

What the guru really wanted to teach his students is using the candlesticks to detect the market flow. But some of his students can hardly grasp the essence of guru's theory. Just before his dying, the guru decide to write some codes which are easy to remember and hope that can help his dumbest students survive longer.

Then many years later, his codes or so called "candlestick patterns" were spread out. Some traders with same dumbility worship these codes and believe they have some magic power. Some traders study those codes carefully for years and finally realise whta the guru really said and made tons of money out of market.

Hope this help! good luck!

Naked shorts · 1 March 2009

Trembling Hand said:
Its not all about closing price. Its about Current price. And I don't think its about 1 individual candle but where it is compared to the ones before it. So I don't think it would make much diff if your candle started at 30 sec instead of 00 secs.

But having said that one of my most helpful tools is a 1 min count down timer on my charts.

Example here,

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2008/02/painting-a-pict.html

TH, Where do you get that indicator from?

motorway · 1 March 2009

acetrader said:
Forget those patterns of candlestick. They were for the dumbest student of the ancient rice trading guru in Japan.

What the guru really wanted to teach his students is using the candlesticks to detect the market flow. But some of his students can hardly grasp the essence of guru's theory. Just before his dying, the guru decide to write some codes which are easy to remember and hope that can help his dumbest students survive longer.

Then many years later, his codes or so called "candlestick patterns" were spread out. Some traders with same dumbility worship these codes and believe they have some magic power. Some traders study those codes carefully for years and finally realise whta the guru really said and made tons of money out of market.

Hope this help! good luck!

It reminds me of Tai Chi Chuan
some Know all the names
like they now the names of Railway stations

STATIC

and they are often as ineffective

others are like the moving train
they never really stop at the stations

DYNAMIC and effective

Process Vs States

motorway

Trembling Hand · 1 March 2009

Naked shorts said:
TH, Where do you get that indicator from?

You using NT?

If it's not in their standard indicators it was off their support forum.

Naked shorts · 1 March 2009

Trembling Hand said:
You using NT?

If it's not in their standard indicators it was off their support forum.

ahok, I have found it now. For the others that might be interested, the NT name is "bar timer".

acetrader · 1 March 2009

motorway said:
It reminds me of Tai Chi Chuan

You are a genius, I practice Taekwondo actually. :nunchux:

Intra-day trading with Candlesticks

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