Turn off your candles

In one of the CDs, Gary says that if a student is too focused on candles, he tells them to turn off the candles. That way, the only thing you have is your indicators on which to base a trade. Has anyone ever done this, and if so, did it improve your trading?

I turn my candles off to assit me in finding support or resistance. That only way I have been able to turn my candles off is to make my chart a line chart. I then take an extension line and put it above my candles and click. Then I change the chart to a line and go back to the extension line and clone. I drag that line extension across the chart and look for at least two touching points and the best is 3 or more. I do this on a 55 and Daily. Then I click the extension line in place and go back to candles. A line chart will not show me gaps and I sue gaps a lot for support and resistance.

I do not rely a lot on candles but there are some that make great signals.

Dash, your comment or question about trading with no candles sparked my interest. I can definately remember that comment from Gary on the CD.

I was really busy on the 9-5 this past week, so I did traded 2 days based on no candles or charts. Of course I did practice trades. I simply used my cell phone and my desktop to see what was going on with specific stocks.

It is amazing how the natural instincts of trading "kick in" when you do not have all tools. I felt fairly confident in each trade, and that is just crazy to me. A year ago, I would have never dreamed of attempting to trade with no candles. From this point on, when I know I will not have access to all of my tools, I will practice trade and expect success. I also accept that chances of having profittable trades are minimized when charts are not available.

I turned off my candles several months ago. I really like the way it makes the chart look simpler and helps me focus on the indicators. I have also been using the E signal (combination of moving averages) that Darcy/rookie30 talks about - it's a lot easier for me to see when the candles are off.

Trendtrader - in the RTT Trends post, you said that you use the daily for making trades. Do you have a separate chart with the E signal? If so, what size chart is it?

Would you consider posting a recent example of a daily trade made with candles off?

I use the E signal on the daily as a confirmation signal. I'm not sure if this is the exact same E signal as Darcy uses. Mine is the combination of three moving averages (5, 10, 20) on the Daily chart. You can see the E starting to form on May 9-10 timeframe. CHK currently has good RTT 2-week and 4-week trends.

stockcharts.com/c-sc/sc?s=CHK&p=D&b=5&g=0&i=t63622422177&r=1369074426881



Edited 2 time(s). Last edit at 05/20/2013 01:43PM by trendtrader1.

@trendtrader1 Yep your E is the same as mine. I have a daily E chart as well.

As far as candles go I like the candles especially when it comes to some of the major signals such as a bullish engulfing or hammers...hanging man or bullish kickers. I do like them as well for gaps. I found the gaps very helpful today for support and resistance.

For instance AAPL gap on Daily chart from Feb 23 - Feb 24 is interesting. I measure gaps fom body to body using a red ray dash line (although most teach to use the wicks I do not) and then an extra line centered in the middle of the gap. When these get tested I mark either a solid dark red (2 thickness) if the gap is tested and fails to go higher or a solid green (2 thickness) if the gap is broken (candle closes above ALL 3 gap lines).

Looking at the Daily I can see AAPL has not been able to break the gap line created between 2/23 and 2/24 and it failed to break the center gap on 2/11 and 2/12. These gap lines have become major resistance. AAPL will not see above $500 until a daily candle closes above all 3 gap lines.



Edited 1 time(s). Last edit at 05/20/2013 03:12PM by Darcy2.

Yep- those are the same moving averages I use. The MA settings seems to work well on any chart, if you know what you are looking for. Just be careful depending too much on the "E" because if ALL the fingers or lines are not pointing in the direction of your trade, it could be a "headfake". Also, I have to see confirmation on other indicators along with the tool. Personally, I have gotten to a point of discipline that if the "E" is not there, it is simply not a trade for me-I do not care if all other indicators are- NO "E"-No TRADE!

Last thing about the "E"..... If the fingers continue pointing in the direction of my trade with little to no signs of bending, I normally stay in the trade-unless I am H.I.S.