Contrary to popular belief, the superior way to view price is not through candlesticks or OHLC bars.
Its HLC bars. HLC bars are the superior choice. Why? Good question...
The reason HLC bars are better is because I found out that the open price is completely redundant when analyzing the charts. Also the majority of indicators out there don't use the open price.
The open price is useless because it doesn't tell you what happened during the bar's life, only how it started, whereas the high, low, and close tell you how price moved during the hlc bar's life. The high, low, and closing prices of a bar are all you will ever need, and they tell you what the sentiment of the bar was. The equation for sentiment:
Sentiment = 100 * (Close - Low) / (High - Low)
What does this suggest? It suggests that candlestick patterns aren't real!
I used to believe in candlestick patterns. They were actually the first thing introduced to me when I started to learn about trading.
But now we all know the truth.
This is very good news because it simplifies the charts!
So next time you look at the charts, view them in HLC bars ;)
Its HLC bars. HLC bars are the superior choice. Why? Good question...
The reason HLC bars are better is because I found out that the open price is completely redundant when analyzing the charts. Also the majority of indicators out there don't use the open price.
The open price is useless because it doesn't tell you what happened during the bar's life, only how it started, whereas the high, low, and close tell you how price moved during the hlc bar's life. The high, low, and closing prices of a bar are all you will ever need, and they tell you what the sentiment of the bar was. The equation for sentiment:
Sentiment = 100 * (Close - Low) / (High - Low)
What does this suggest? It suggests that candlestick patterns aren't real!
I used to believe in candlestick patterns. They were actually the first thing introduced to me when I started to learn about trading.
But now we all know the truth.
This is very good news because it simplifies the charts!
So next time you look at the charts, view them in HLC bars ;)