Exposing Ideas to the Envelope of Serendipity



Contact moo at: bluechipbulldog@gmail.com



Sunday, May 27, 2012

Jack Jumped Over The Candlestick!


Japanese Candlesticks have become my renewed obsession, ever since mo brought them to my attention again a few weeks ago. Furthermore, I've been using them in recent trading decisions. So far, from what I've found these patterns alone are not good enough. Confirmation is absolutely required! 

I picked up Thomas Bulkowski's book "Encyclopedia of Chart Patterns" a while ago as a reference and I'm dusting it off. I remember being very intrigued on their use.

One thing I did discover, ThinkOrSwim's software (now acquired by TDAmeritrade) shows candle stick patterns (past and in real time).

First here are Bearish and Bullish candle patterns from ThinkOrSwim. I do not think they use the complete set. I'm looking into how to code the others that have higher statistical value in ThinkScript. 

If you click on the images below, it will take you to further documentation.





Candlesticks shown in TOS are color coded to match one of the patterns above. Right clicking on an arrow will reveal the type of candle stick pattern matched. 

Example how Candlesticks and MACD help decide when to enter a SHORT trade on /ES. My next post will show how this approached worked well in recent trades in UVXY and SVXY.



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