Thread by @Am_Shai

I work with candle sticks also. They are present in all my #Orderflow charts  and I have them plotted to the left of my charts .

This disclaimer to all who think I do not use candle sticks and bars.

I repeat they are present in all my charts, even my #Orderflow charts.

But for intra-day , if you are using 5 mins and 15 mins or even 30 mins and using them to make decisions, you are at a big disadvantage.

Allow me to explain. I'll take a few minutes

Candles give us the Open, High, Low ,Close. We call it OHLC.

- 4 parameters to make trading decisions out of.

Then the relation between the open and the close and the shape it gets decides

a) the color of the bar
b) Bullishness or bearishness

Would you agree?

People use the body which is the difference between the open and the close of the bar and call it names

and there are many diff patterns based on the names given.

I do not know all of them and have never used them. But they are all good I know.

Now for an intra day candle, an open of a 5 min bar can be 09.15.01 and close 09.19.59 which is fine.

At the second candle it is 09.20.01 to 09.24.59 and so on till the market closes

Now you tell me ,

why is the guy who traded at 09.20.01 - the open

and the guy at 09.24.59 - the close ,

more important that people like you and me who may have traded at 09.21.50 or 09.23.50 or anywhere in between?

What if someone had the highest volume in the bar at 09.22.01? or 09.24.10 ?

How is he insignificant compared to our open guy and the close guy?

You see I realized long time back, (and through painful losses) than merely working with 4 parameters which are the Open, High, Low and Close was not enough

The markets had become faster and I needed to add more information to understand the candle stick better

Others also knew  about this and added info in the form of MA's. oscillators. stocks to read the candle better.

They needed help to understand the candlestick and the bar and an entire library of indicators was created. All good and perfectly the need of the time

I decided that I had to have more info within the body of the candle and hence went "inside" the candle to see what was happening between the Open and the Close of the bar.

We toggled the bar open and added volume traded at every point between the Open and the close

In other words we added Volume at Bid Price and Volume as Ask Price to the candlestick. There are always 2 prices in the market, not one. The Bid and the Ask

This later came to be called an " Orderflow " candle

Now we had more info than the Open, High, Low , Close of the bar.

For instance we could not see, how much was traded on the sell side and how much was on the Buy side

And the average of the buying and the selling and the place where the highest buying and selling took place

We 'armed' ourselves with more information to read the candlestick better by looking "inside" the bar

Why did we need to 'arm' ourselves?

Because we were not smarter like the rest to trade off 4 parameters only .

And there was a lot of money at stake

And that told us a lot more about what would happen next than 4 arbitrary intra day points and an abstract relation of open and close or type of shape of body

Of course, this worked best on the intra day scale where people traded big size and were in and out before the close

And this information is available publicly. And for everyone.

Only you have to decide whether you need it or not.

I needed it cos I was fed up of my losses and was willing to work on making myself better in a competitive market.