Printable View
I want to share with you a system that I have been using for the last six months in intraday with good results. I call it 3 Candles + Volume. It is not based on delayed indicators, but on reading the action of price and volume behavior. I tested it mainly in EUR/USD and GBP/USD in M5 and M15 temporalities. Basic Rules: Waiting for a strong candle (wrapped or with a wide body)
Your system seems interesting to me because part of a very sensible base: price and volume action. In my experience, most traders are obsessed with indicators and forget that what moves the price is the flow of orders. What you propose with the reversion candle followed by exhaustion in two candles and high volume is, in essence, a reading of the hand change between buyers and sellers. I like that you do not complicate the entry with redundant rules, and that the system adapts well to the logic of the market. The fact that you use confirmation with volume adds a filter layer that can make all the difference between a trap and a real turn. Also, limit it to specific sessions (like the European one).
Thanks for the analysis. These types of answers are the ones that give value to the forum. I learn more about this than many PDFs that are out there.
And what if the high volume is given on the second candle instead of the first one? Wouldn't you be leaking possible good inputs by too strict a rule?
Very good breakdown of strengths and weaknesses. I agree with you that the ATR can be a perfect filter to avoid cheating in directionless markets.
I also use price action and volume as a base. Most want to operate without understanding what is behind the movement.
One question: do you consider some kind of confluence with key levels, such as support or resistance, to further validate the signals?
It's true what you say about the operations journal. I started documenting my entries and it was like turning the light on in a dark room. I discovered mistakes I repeated without realizing it.
Thank you both for this exchange. I�m starting in the intraday and this gave me a very clear idea of how to approach a simple but effective system.
Don't you think using candles so small on M5 and M15 can generate a lot of false signals, even with volume?
The point of the volume as confirmation is key. I use something similar in futures, and without volume, the price stock is caught. Excellent observation.
You should also consider a larger time frame to confirm the macro direction. A nice candle in M15 can be just a recoil in H1.
Very good about the previous range. I apply a similar rule: if the price is boxed, nor do I bother to look for setups, even if it meets all the criteria.
Thank you for sharing such clear ideas. I wish more people here would contribute this way, instead of arguing for egos.
What volume indicator are you using? The classic MT4 or one that has a real volume reading tick volume type?
Totally according to the importance of the diary. In my case, I use screenshots and write down my emotions. It�s impressive what that reveals.
I'm going to test this system in demo for the next two weeks and tell you how it is.
I'd like to see a couple of real shots of the applied system. That would help a lot to visually understand the patterns you're describing.
I don't operate forex, but in actions I see the same behavior you describe. Three candles, change of hands, volume: logic is universal.
This thread is already more valuable than many books of miraculous systems. Here there is reality, experience and cold head.
A question for both: have they tried this system during news or totally avoid it? I am interested to know if they also filter through key events.
I would only add that the risk/benefit ratio can be optimized if you let yourself run a third of the position with trailing stop.
What I like most is that everything revolves around market logic, not magic formulas. That�s how a real system should be.
Have you thought about combining it with order flow or footprint charts? You could have even more solid confirmations of the change of intent.
Thank you for this very constructive debate. It motivates me to stop trying out weird systems and focus on the simple but well structured.
The only thing that gives me doubt is how you define "high volume." In relation to what? Average of the last x candles? A fixed metric?
I am glad to see that I am not the only one who sees volume as a key piece. Without volume, the price moves falsely many times.
Good note about the diary. I also started to register if I ate well, if I slept well, and discovered that those factors also impact my decisions.
I apply something similar in scalping, but with 1 minute candles. The concept is the same: seek intention and exhaustion.
I would like to see you adjust this system to conditions of high volatility, for example during the opening of London.
A lot of courage in this thread. I�m copying several ideas for my trading plan. Thank you for really.
Have any of you tried combining this with liquidity zones or imbalances? It could be a very powerful filter.
Thank you for keeping the focus on the process, not on the outcome. It is refreshing to see that there is still sanity in this forum.
I believe that this type of system works as long as the operator is mature enough to follow it to the letter without intervening out of emotion.
All this makes me think that, beyond the system, the important thing is to understand what the market is doing. And that you do with practice, not with shortcuts.
Excellent reading. I am going to build a backtesting plan for this system right now. Thank you for so much useful content.