StockFetcher Forums · General Discussion · Using candlesticks for trading<< 1 2 >>Post Follow-up
26 posts
msg #97254
Ignore casinotech
10/30/2010 7:50:19 PM

Hi guys. How many of you trade using candlesticks like Bullish Engulfing? I have decided to try this and created a filter that finds stocks with bullish engulfing. Since this method is best with stocks in a downtrend I also use ADX to gauge whether or not the trend is weakening and ready for a breakout.

Does anyone else do this and how profitable is this method?

33 posts
msg #97287
Ignore deanengle
11/1/2010 11:00:34 PM

I think your following of candlestick patterns is fun but should be taken with a grain of salt.....none of these patterns are certain but they do point to potential areas of may ultimately be more successful utilizing other types of filters which have proven profitable. 1 example you might try is with the stock price above the 200 day moving average and the RSI(2) below 2, there is a strong tendency for the stock price to move up in 3 or 4 days. I just trade to satisfy my ego and in the process make a few bucks to pay off Obama et al. I suggest you paper trade this filter process for a brief period of time to confirm it's validity. Be advised that I do not buy stocks as an investment ( that would be like just sitting and watching the grass grow ) My forte is options and I target my time in an option position for under 10 days. So very short term and extremely dynamic moves are the rule to play these options trades. If a paper trade has not worked out in 10 days, flush it down the toilet !!!!

All my indicator times are very short for slow stochastic 5,3 // rsi(2) // williams %R 4 // CCI 4 /// MACD 4,7,3 // and the ultimate oscillator 2,5,10 with this stuff by paper trading, never use any money until you are relative sure of what the rules of the game are. If you are just into buy and hold and do not want to test your skills against the predators waiting to gobble up your money, continue to do what you are doing as I can always use your money ??????? if this works out for you and you care to have another tid bit tossed at you, let me know after your verification of the above....

106 posts
msg #97293
Ignore taylorsk
11/2/2010 11:38:27 AM

Suggest you run some statistics filters before committing real money....

3,317 posts
msg #97297
Ignore four
11/2/2010 2:03:21 PM

draw rsi(2) line at 25
Full Stochastic %d(10,3,3) 1 day ago < 30
Full Stochastic %k(10,3,3) > Full Stochastic %k(10,3,3) 1 day ago
Full Stochastic %k(10,3,3) < Full Stochastic %d(10,3,3)
close > 1
avgvol(22) > 546987


----------------------------------------------- above filter is preferred ? -------------------------------------------

draw Slow Stochastics fast %k(5,3) 1 day ago < Slow Stochastics Slow %D(5,3) 1 day ago
draw rsi(2) > rsi(2) 1 day ago
rsi(2) > rsi(2) 3 days ago
rsi(2) < 25
avgvol(22) > 80000
close between 5 and 100


26 posts
msg #97303
Ignore casinotech
11/2/2010 10:42:53 PM

Thanks guys for the tips. I have been using several technical indicators in the past with great success. I decided to look into candlestick patterns. I used stockfetchers Bullish Engulfing pattern and it spit out a lot of crap. As anyone who is familiar with candlestick patterns knows, the bullish engulfing pattern is supposed to be used for stocks that are in a down trend. The SF filter listed stocks that were in overbought territory or in an uptrend. When I find a pattern in a downtrend I check to see if stochastics is oversold and starting to curve up and RSI is under 50 and curving up and MACD trend line is curving up. I found 4 stocks like this in the last 2 days and I am in the money on all so far,and the chart looks bullish.

I have a few filters I use to buy very oversold stocks with RSI(2) under 1 and stochastics below 2 and have been very successfull so far. On days when the market is up it is hard to find oversold stocks so I can now look at my BE patterns and buy only if the above criteria are met and I get a buy confirmation like a white candlestick.

26 posts
msg #97446
Ignore casinotech
11/12/2010 6:44:06 PM


Well the candlestick charting didn't work, took losses albeit small ones. Back to my proven oversold stocks .

133 posts
msg #97552
Ignore decipherlinda
11/18/2010 9:16:16 PM

I couldn't invest if I didn't have candlesticks but I use them more for assessing what's happening during the day when I'm looking at a chart. Maybe that's the way you folks do too. Maybe not.

There can be a lot of variability in using candles that you can't always program in. For example, I've seen many a Bullish Engulfing that took three candles to play out instead of two or a Morning Star Doji that took four candles to play out instead of three, like they're supposed to.

Other times, a Bullish Engulfing looks more like a piercing pattern (due to a gap up) unless you mentally draw the while candle down to the bottom of the black candle closing from the day before.

In case investors who aren't familiar with candlesticks are reading this, Steve Nison (the guru who brought candles to the USA) says you really only need to know 10 to 12 candle patterns, even though he describes a gazillion.

Anyway, candles are only for very short term use. I use them "right here, right now" to get in and out of stocks. They work.

931 posts
msg #97556
Ignore Mactheriverrat
11/19/2010 7:51:53 AM

pattern is Bullish Kicking
and close is between 1 and 80
AND and and Average Volume(10) is above 100000
and show stocks where the StochRSI(14,14) crossed above 0.20
Draw EMA(13)
Draw EMA(26)
Draw EMA(50)

I watch the ROC rising and crossing over 0 and the StochRSI rising from oversold. Study some of the winners from days before. Study them and study them some more. There is always a Bull market somewhere.

931 posts
msg #97558
Ignore Mactheriverrat
11/19/2010 7:56:22 AM

See the Bullish kicking on nov 4 , see the ROC, StochRSI

931 posts
msg #97563
Ignore Mactheriverrat
11/19/2010 2:49:23 PM

I got in at $5.09 and out at at $5.59 for a return 34.69%
Every day I put a stop loss of penny or a few cents below yesterdays close that ended at the end of the day. Now I know that I won't get 34.69% everytime and some stop lose orders will kick in but at least I will be able to live, fight and trade another day.

StockFetcher Forums · General Discussion · Using candlesticks for trading<< 1 2 >>Post Follow-up

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