Hi,

After finishing Brooks' Reading Price Charts, my next read is Bloomberg Visual Guide to Candlestick Charting. If you read it, what do you think about it? How helpful has it been in your trading? Opinions and applications are all welcome.

Happy trades!

Didn't read the book (so you can ignore from this point on if you want)

i just think the whole candle stick pattern argument is so unsubstantiated. I studied everything to learn the markets for thee past 8 years and candle sticks was one of them.

now that i am getting better and better at back testing etc. i have yet to see any conclusive proof that candle stick patterns give an edge. If there is some one else out there that is seeing way better results in testing candles tick patterns i am all ears.

mahanik21 

Didn't read the book (so you can ignore from this point on if you want) i just think the whole candle stick pattern argument is so unsubstantiated. I studied everything to learn the markets for thee past 8 years and candle sticks was one of them. now that i am getting better and better at back testing etc. i have yet to see any conclusive proof that candle stick patterns give an edge. If there is some one else out there that is seeing way better results in testing candles tick patterns i am all ears.

You may be right. The more I am reading it, the more I realize that I am wasting my time. They start by showing some rare patterns, that I have never seen.

In your 8 years of studies, what books and resources have you found helpful? I just finished Brooks' Reading Price Charts. What do you think of that one? What is worthy of studying?

mahanik21 

i just think the whole candle stick pattern argument is so unsubstantiated.

I have no proof either (and don't use candle sticks). But I have read the Steve Nison book on Japanese Candlestick Charting techniques and tend to think there could be validity in there use on longer timeframes, such as Daily, Weekly or Monthly charts as they were originally used. Basically time periods that are actually a valid unit of measure that means something. A day had a pit open and a close and what price did that day is important. The same for a week or month. If on a weekly chart price opens at the bottom of a range and then pushes down out of the range but then fails to attract more sellers and closes back within it, then that "Hammer" means something. Candlestick patterns can provide a nice visual shorthand for easily classifying market states.

I think where people can get in to trouble is they look at candlestick patterns with no consideration of whether the time frame they are using actually has any relevance in the real world. They then try and use candlestick patterns on a 5 minute chart or something completely meaningless.