LEARN MQL5 TUTORIAL BASICS - CANDLE PATTERNS
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With Metatrader some things can be automated. In this video we talk about why candle patern recognition is difficult for an Expert Advisor.
In this video I would like to talk about candle patterns, and if MQL 4 or MQL 5 is a good way to work with candle patterns. So here are my thoughts about this. You might not agree with what I say, but I wanted to be honest and address the issue. So here is a candle chart. And some people like to watch for patterns that should show something that is happening in the future.
Actually, we have candles that have a shape. This one is called a hammer. This one is called a Doji because this candle has no body. And depending on the kind of candle and the kind of formation for those candles, some people make decisions about if they want to open a trade or if they should close the trade. And for some things, it's easy to calculate.
For example, this candle zero is a so called hammer, and that means that the open, the close and the high price are equal. You can see that in the tool tip text here. A Doji can be spotted by checking if the candle open price equals the candle close price. That is the case here. A bearish candle will always have a close price that is lower than the open price.
And for a bullish candle, it will always be the other way around. You will see a higher close price than the open price is. And there are candle patterns for almost everything. For example, a lot of bullish candles in a row or a lot of bearish candles in a row. But when you move the chart, you will see that the candle size is relative.
It's not a fixed value. So what you see with your own eyes is changing when you scroll inside of the chart. And that's not how automated trading works. Automated systems are looking at price data. Now let's switch to the line chart view here.
And this is how MQL 4 or MQL 5 sees the price data. It's just a line of prices. So now try to find a Doji, a hammer or any kind of candle pattern. That doesn't mean that it isn't possible, but it's not the best way to do it. If you have a toolbox, you are trying to find the best tool for something.
And in my personal opinion, Mql4 and MQL5 are not the best way to find or trade candle patterns. And the second thing is that I don't believe that candle patterns are able to predict the future. There are other components in the trading system that will make the difference between profit and loss, and most of it is what happens after you have opened a position. And when I am asked if the entry signal is the most important thing, I always say that I don't believe that the restaurant I picked for the first date is the reason why I am still married with my wife.
I could have picked another location.
But to make a marriage happen and working, you need to do a lot of things right after you have had the first date. You might have a different opinion, but this is just mine. And I wanted to address the topic. So if you like to trade candle patterns, I would suggest to not use automated trading with Metatrader 4 or 5.
But if you want to trade price data and create an automated system that might improve your current results, you maybe want to watch one of the other videos or visit our website where you can find the premium course. And now you know why I don't trade candle patterns because I prefer to write just few lines of MQL code.
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