numbertea

From a candle pattern you can many times be correct to gleen off the order flow characteristics that sometimes represent the pattern. The picture shows an excellent entry point. The problem is that the reversal order flow that the pattern sometimes indicates may not be true here and you would not know that for sure with just price and volume. The good thing here is that if you are right then great entry. If you are wrong then a quick exit is obvious so depending on what the rest of your trading plan is, this is a good entry point for reversal. You can't be correct 100% of the time with it though. Cheers

Those are great signals! I have traded on them many times myself. Other indicators keep me from trading the wrong ones. Cheers

"Japanese candlestick charting" has numerous patterns that are considered by many to be high probability. IMHO there is more to it than just the obvious. Candlesticks patterns are a way to describe market sympathy, ie, market pressures. Many many patterns that correctly indicate market sympathy can be found that are not part of any list of patterns I've ever seen before. I have been cataloging market sympathy changes as candle patterns at those times and integrated these into my automated trading system with excellent results. Beauty is more than skin deep and the candle pattern theory is beautiful. Look beneath the surface for understanding and a new world of trading will open up for you as it did for me. Cheers

Completely confused, are you sure that you want to say that economic and political imperatives do not DRIVE market pressures, thereby moving price??? I can see market pressures in the candlestick patterns and I back up my findings with market flow calculations before I trade them. Cheers

I have heard that the ES, which are futures, are sometimes used to hedge large investments of stock. This to me explains correlation of large volume increases on any timeframe. For myself I don't find that this provides an edge. Cheers

I have been automating my trading which looks at all data for the ES on a trade event resolution. Right there, the data I look at is per event and that negates overall need for close data.... But I also use candlestick and price movement in a 5 minute resolution where I take into account close prices as well as others. The thing that really pertains to this thread that tickles me is that I was having issues with price gaps throwing off my bid/ask calculations. I racked my brains for a while to come up with an easy solution of using mid bar price for my calculations where I was using the close previously. Now all is well. Pick what works for you. Cheers

Start with an awesome Internet connection which will give you higher data flow priority through the WWW. This is definitely a drawback if you cannot get it. I've tried a couple of data providers after getting a fast connection. Cost is still a consideration. I use LightSpeed and love it. I only trade during normal Eastern coast business hours. They are out of New York. Cheers

I use both bid/ask data as well as volume, trade events, and price movement. All these things impact future price. I trade the ES. I am very interested to hear about how you can possibly predict the market without taking price into consideration. Because of the tick size I had to specifically build my system for the ES. If I want to use my system on other instruments I would have to rebuild it with the other instrument price considerations. Any information about how to consider market sympathy without price data would be greatly appreciated. Cheers

I use the cumulative bid/ask during the time frame used. I make my entries and exits using 5 minute bars to avoid harsh whipsaws and look at longer term bars for the bigger picture. Trade events per bar is an indication of liquidity, interest, and sometimes that is a nice reinforcement of a big move. I use the cumulative bid/ask to create order flow profiles that I use alongside candlesticks giving me very good results as the false signals are easily identified. I trade the ES. Cheers

Looking at the bid ask cumulatively gives me an idea where the market will head in the short term. Combined with candle patterns the information gives a reliable signal for future price. Is anyone trading using these signals together. I am wondering if there is something besides cumulative bid vs ask that I should be using instead with the candles. Any thoughts? Cheers

Bars in combination. Patterns that repeat. Order flow. These are the essence of candle charting. I used them for years in combination with observed strong uptrends or downtrends getting in and out on reversals. Sometimes they work, sometimes not. Double and triple tops they identify great. Double bottoms also, but triple bottoms not so much. I currently have taken to combining candle patterns with cumulative order flow and the results have been excellent. I would say that the candle patterns represent order flow/fill patterns and that is the theory behind them. When you see cumulative order flow along side a candle pattern you don't question the relevance anymore. They are tradable and for my trading, very relevant Cheers.

To learn to read the tape I recorded the days data for the ES and replay it at night so that I can still have a day job. Tape reading is a wonderful extra tool for trading and its use has changed my trading for the better. I programmatically analyze the tape data for different time frames and that analysis gives me the information I need to stay on the right side of the market which prevents me from having losing days. My trading is based on repeating patterns of price and bid/ask levels. I have made custom indicators that span multiple time frames and it seems to me that order flow and ease of price movement is the most consistent indication of future price movement. Cheers