The Candle

Wednesday, 23. October 2013

The ratio of the number of occurrences of candles of type 1 to the number of occurrences of spark type-2 will give us ratio of profitable trades K. But to hold such an investigation, we already have on a particular trading tools on the volume where then going to use our trading strategy. And here, we must decide those candles of the time period we use for our strategy. In order not to waste time on long explanations, I just suggest using a candle D1, at least because of their price range will allow us to extract Profit from day price movement and we will have during the day just one point to enter, it will also be comfortable enough condition for our strategy. If in the process we have conducted statistical studies, we deliver a goal not only to determine the frequency of candles of any type, but also try to determine the sequence of their occurrence, as well as try to identify any additional depending upon appearance (for example, this could be: the expected economic news, the shape of the previous candle, passed up this price range, location of candles in the trend, etc.), then apart from the factor K, we may appear additional terms and conditions by which we can control this factor K. For example, our research shows that after 3 consecutive candles of type 1 are frequently followed by a candle type-2, then for our strategy, we can introduce an additional rule – ignore trading signals after 3 consecutive plugs of type 1 until, until the candle is a type 2

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