iCharts Discussions

[Ravi_S]

Guys,

We have few threads where we are discussing strategies. But I see there is a thread missing which is dedicated to Candlesticks. Anyone who sees some good patterns or traded some patterns on a given day can post their findings/results here. Hope this thread would invoke interest among everyone and hope this thread rocks as lots of other threads here..

So, what to wait for, start firing ....

Regards
Ravi

[amitkbaid1008]

Hi Ravi

In my view these patterns fail more than they succeed. Particularly reversal patterns because they go against the trend. They are more successful when they are used in combination with trend.

In my opinion these patterns should be followed when they support major trend.

[singh.ravee]

Ravi,

Another good initiative by you. For me its a wish come true.

Hope to have many rocking candlestick chart patterns posted in this thread.

Regards
ravee

P.S: Sherbaaz bhai ravi ne aapka kaam bahut asaan kar diya.

[singh.ravee]

amitkbaid1008

Acc to my limited knowledge, best use of candlesticks is to gauge a reversal. If these reversal signal comes at previous support or resistance, its an added advantage.

I am posting chart of hindalco 60min as case in point.

Thanks and Regards

Ravee

[singh.ravee]

Hi,

The best use of candlesticks as reversal pattern was evident in banknifty 60min. I am sharing my personal experience only.

Day 1 starts.
1. 10700 is an old resistance.
2. A doji appeared in uptrend after a tall bullish candle. First signal that bulls are loosing force. Marked in first oval.
3. Next candle is bullish candle. seems bulls again took over.
4. Gravestone doji appears. Marked in second oval. Let me think twice; are bulls still in control? Remember when it all was happening nifty was trending upwards
5. Immediately followed by bearish harami. Marked in second oval.
Day 1 ends

Day 2 starts.
1. Bank nifty starts moving up; crosses 10700. Question of the trade: When I should go long in bank nifty?
Answer: If bank nifty tests 10700 from upside.
2. A candle which completes at 1200pm is a tall bearish candle. Its a bearish engulfing pattern also. Moreover it engulfs 7 previous candles.

What else can I expect from candlestick patterns. Since, I was short in Hindalco, so I could not trade it personally. However, advised one of a friend to open short= 10600; He could earn more than 180 pts.

Also note, that I have not used any indicator to reach upon the conclusion. However, If any indicator, supports candlestick pattern, its always an add on.

Regards

Ravee

[amitkbaid1008]

Hi Ravee

Here comes the problems in using Candlestick patterns.

First one is about identification of pattern i the instant case the first pattern on BANKNIFTY you observed is a DOJI but for me thats like spinning top that too bearish because it was black spinning top.

Another pattern you identified is GRAVE STINE DOJI for you but for me that's Inverted Hammer although both are to be considered as bearish

Next pattern you identified is BEARISH HARAMI but for me there is no pattern.

Last pattern was a BEARISH ENGULFING

But out of 3 (as per me) and 4 (as per you) bearish signal one signal worked. That's why I said these pattern fails too often than they succeed.

I am posting a chart of NIFTY where I marked a BEARISH ENGULFING pattern on EOD charts. The trend was down and NIFTY was retracing and such candle to end the retracement was good signal of resuming major trend.

The candlestick patterns should be used in combination with trend only.

[sherbaaz]

[singh.ravee]

Hi,

As pointed aptly by Sherbaaz, Candles capture psychology.

First 3 signals as seen by me were telling only one thing that something is wrong with this uptrend in banknifty. We need fresh buying for a true uptrend to begin. The bearish engulfing confirmed that bulls are not in-charge of bank nifty.

I am pasting a text from a book written by Steve Nison
An important principle is to place a new position, only if, that signal is in the direction of the major trend. For example, in a bull market, a top reversal pattern appears. This bearish signal should not warrant a short sale, because the major trend is still up. It would however signal a liquidation of longs. If the prevailing trend is downtrend, then this same top reversal formation could be used to place short sales.

Thanks and Regards
Ravee

[singh.ravee]

Hi,
This chart was first pointed by "Technocalls". I thought its an important signal and should be posted in this thread for further comments.

For me its a star; first hint of bottom; its incomplete so any logical conclusion can be drawn only by the end of coming week.

Thanks and Regards

Ravee

[technocalls]

i thing sharebaazbhai should throw some light on it ....

[singh.ravee]

Hi,
A nicely defined hammer at long term support = 5250. Hammer was able to get confirmation also.
One can think of going long around 5300-5320 with sl= 5250; tgt= 5440 - 5560.
thanks and regards
ravee

[chetan83]

[singh.ravee]

Chetan,
We all know that nothing works all the time. Kindly do not draw any conclusion based on one chart. Let me post atleast a dozen charts and then analyse the success rate of candlestick.
Regards
ravee

[singh.ravee]

Hi,

Is it a star in downtrend in nifty eod?? It appears at a long term support of 5250. Confirmation is still pending.
Lets c tomm n in days to come how it unfolds.

thanks n regards

ravee

[chetan83]