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I am testing candlestick patterns on 610 tick charts on ES futures NY open session. But the dilemma is, I find something new today and scalp 5 points very well, but it will not work tomorrow. I find something new tomorrow, it will not work the day / week after.
What is the catch here? Trial and error methods don't work? I am trying to find a good regular candlestick pattern on tick charts (maybe working on minute charts), but they don't work here.
My profit is strictly 4 ticks and stop put at 5 ticks, which has worked on 'patterns' I found so far, but these patterns fail to work everyday.
Any suggestions, especially from any candlestick 'lords' here?
Candlesticks on Futures charts are essentially worthless aside from temporary real-time data. They are based on an index, the index doesn't matter as far as price or our candlesticks, it does what it wants. The only way to get around this truly, as with historical learning algorithms that take into account say every other Tuesday following a Monday when the second Tuesday of the previous month was the 6th or some such.
The candlestick is invalid because if the index moves the candle will invariably move with it, regardless of what was just happening.
My advice to you - do not place even one more trade before you watch the whole 4 parts (long, I know but worth the time if you want to be the owner of the casino, not the loser plays slot machine)
I found that my setup doesn't work on the ES, AT ALL! Mines an indicator setup, and the ES just doesn't produce it. For whatever reason, it's never worked. Maybe try a different market. I found my home on Gold CG/ and Crude Oil CL.
You should spend much more time observing different time frames to see how price action works in different market conditions. Once you develop some basic knowledge you begin question yourself why certain patterns work in one market condition, but not in others. From there, you can begin to develop trading plans when to trade or when to avoid these patterns.
I suggest you use 'something' to backtest your patterns.
Currently, you are backtesting, but for just one day or so.
If you backtest a pattern over the course of several years of historical data, you will find the results are orders of magnitude more robust than your current methods produce.
Of course, the telemetry you receive from backtesting will inform you as to the reliability and viability of trading a particular pattern.
