How True Are The Candle Charts

[Magician]

Hi Guys, a while back I subscribed (yearly) to a fx currency strength feed, I received a number of PDF out lining some strategy’s etc.
Stay with me, it's a bit long winded, but I think well worth the read.

I read “ Quote...I have often said that the candle was a conspiracy to keep beginners from seeing true market action. They sometimes turn green too early and red too late. Almost like someone is programming them.”

There’s more

“Quote..As a programmer I have an appreciation of what is possible to do with the data and platforms back end suppliers give to their broker who in turn gives to me. Are they doing things we don’t know about?” end quote

I trade with multiple monitors, and I had 2 brokers candle charts 15min up on 2 of my monitors, price was at a high, and by all account ready to fall, if your trading by candles that is, one brokers chart read doji long upper wick, flashing from green to neutral, we will call this (1)the other brokers chart was green and rising a little, but was not a doji, we will call this (2) however something curious happened,

On my independent feed that shows the strength of the currency, I noticed price rising, one broker was green and rising (2) the other was level yet flashing from green to neutral (1)but going no-where, it kept up for around 10 pips, based on the other brokers chart that seemed to be reading true, then suddenly the doji type (1) jumped, I found myself asking was this delay in chart movement intentional, allot of traders would be going short and placing there stops, the trade it's self was a high probability trade (short), so there could well have been a number of tight stops.

I was able to see this more easily and by this I mean the rising price action, for I was using the currency strength feed, independent and not trade-able by it's self

I am not going to say which brokers, that's not my point, it left me with a suspicion I cant easily shake, I don't trade candles any longer and I apologise for the lack of detail description of the event in question, it makes me wonder however are all the fake-outs market driven, or are some manufactured?....

[Enivid]

Two points here:

1. Never trade using current candle as a signal. Always wait for a candle to fully close before considering it a Doji, a Hammer or whatever else.

2. Broker data feeds can be different. If they have different feed/liquidity providers, the delays and data may differ by seconds and pips. And yes, some brokers may even manipulate their feeds. That's why it's recommended to trade at higher timeframes unless you are using some reputable ECN broker in whose quotes you are 100% sure.

[Easy Trader]

Originally Posted by Enivid

Two points here:

1. Never trade using current candle as a signal. Always wait for a candle to fully close before considering it a Doji, a Hammer or whatever else.

2. Broker data feeds can be different. If they have different feed/liquidity providers, the delays and data may differ by seconds and pips. And yes, some brokers may even manipulate their feeds. That's why it's recommended to trade at higher timeframes unless you are using some reputable ECN broker in whose quotes you are 100% sure.

Spot on!, this may seem harsh but Forex is a buisness and along with business comes the vultures. In my opinion newbies trading on 1m-5m-15m charts are dead money, I was and didn't really make any head way in my trading until I moved up to daily/weekly charts then as I got better worked my way down to 4hr and im finally testing 1hr...

[Magician]

Originally Posted by Easy Trader

Spot on!, this may seem harsh but Forex is a buisness and along with business comes the vultures. In my opinion newbies trading on 1m-5m-15m charts are dead money, I was and didn't really make any head way in my trading until I moved up to daily/weekly charts then as I got better worked my way down to 4hr and im finally testing 1hr...

As I say I don't use candle charts,
My leverage is 200/1 and for me to trade 4hrly / dly using this level of leverage, it isn't me, I use hrly for trend and 15 & 5 mins to trade.
There is of course less noise the higher you go in the charts, but 200/1 on the dly could hurt me.....
If and when I can trade 20/1 leverage then with out a doubt I will be trading higher time frames, for now I am very familar with my times and charts.
Because the practice of manipulating the feeds are common one must never accept this, bad practice will always be bad practice...

Kind Regards
Gary