DislikedHello Peaches,hello all,
Thank you for your input on this thread.I am actually calling your attention cos it seems Hussin has chosen not to respond to my posts and questions for best reasons know to him http://www.forexfactory.com/images/icons/icon9.gif.I hope you will not mind my questions no matter how newbies they may look or stupid they may sound.I do hope you will be magnanimous enough to a brother,friend and help in understanding this business better.Urgent response pls.
Sincerely,
ADESHINA.Ignored
greetings to Lagos, which I have searched and located on a big world map.
As others sayed, hussin sometimes is not able to access internet. Leaders of his country discussed about to forbid forex for private people too.
I try to answer your question, and maybe Hussin might go deeper in detail.
Your first question was, how to differ a good candlestick from a defective one. Thats a pretty good question, because you might see a defective only later, after price has moved forward and your stop loss (if you have one) is hit.
I like to suggest you a book "Encyclopedia of Candlestick Charts", where over the years Mr. Thomas Bulkowski has statisticaly analyzd millions of candlestick pattern. The result is pretty disappointing. For a bearish engulfing candle it got a over all performance ranking 91 out of 103.
So from my experiance a good candlestick has a lenght. If it has a body, it is pretty large. It must jump out of your computerscreen and say: Look at me, compared to my other brothers and systers, I AM BIG.
In the usd/lfx we have seen this daily large candle.
In the eur/usd weekly I marked some bearish engulfing. The light red one have a healthy good big body, they have been succesfull.
But I also marked 2 candles in light green. They have a long body, but have been not successfull. So why ? They appeared at a price level, where in the past price has turned. So there is a good chance, the at the light blue area a bearish engulfing will not be successfull.
To make a long story short:
1. Look at the lenght of the candle, compared with the previous ones, it has to be BIG.
2. Look where it appears. How has price behaved in the past at this level ?
greetings
Peter