Chart Patterns

[Wysiwyg]

On that stock the stop loss went under recent support so trade is over. Yes a more in trend example would be better.

 

[Joules MM1]

shall come back to this (shape and target(s)) and do a follow-up of the earlier post for xjo

 

[Joules MM1]

what other "patterns" might confirm chart patterns, or, can we say a series of trade units (in this instance days) that produce a pattern, not like a wedge n such but like a discernible pattern and is similar to what we generically call patterns

can we say in this series of representational patterns:
that we see o/s money flows within the 13 week due to falling AUD against the USD (mostly) for undervalued yielding large cap aussie stocks combined with reflexive retail/managed money exiting in the nearterm thru the 21 day money flow lens

would we see a pattern of units as a divergence (longs only)

in some way this type of patterning, of repetition, has benefit, if only to say 'it aint obvious' that i'm right
and in this instance maybe this would be fair to say short term money is exiting by the patterns represented and the risk part is the longer term money is still piling in, keeping in mind that any decline within these two instruments on rising USD against the AUD only makes the value look that much more enticing .....this highlights, if nothing else, that context and relative size have value

View attachment 87335

a typical pattern seeker in the larger time frame would be looking for an inverted right shoulder, a bullish idea......so this highlights a big big problem with pattern recognition: time
which equals: elevated risk

so let's say we go with the inverted head n shoulders idea, it's a long time to wait for the play to print, we dont even know if the idea will pan out...tic toc tic toc....the pattern begins to play out, but how deep, how do we know the pattern is confirmed, tic toc tic toc, oh, looks like the pattern is confirmed, how far away is the uncle point where we say uh-oh mashed that one and we are forced to exit, how wide is that price risk getting?

by the time a trader has spotted a pattern, confirmed the pattern and taken action, by that exercise, the trader has created risk, that is, the risk is wider than by using an orthodox trade technique because time usually continues to shift risk as the pattern unfurls...... the longer you take on deciding to tackle that 190cm full forward the more time he/she has of sizing you up and dropping one shoulder while side-stepping off the other foot

ideas (some parts of your daddys market never change)

follow-up ....this asks the question about what defines a pattern as a single idea versus that you look with your eyes but you see with your brain, the patterns are a series of repetitions within price and none of them are equal in measure yet may have equality in targets and/or intent
of course, i am only expressing my ideas on how the cat gets and got skinned and likely to get skinned a second time!

same gig diff view:



the next challenge is not to see the patterns but to interpret confirmation for actions as we break down the time scale for entries n exits ......anyone who says you cannot do something may not have full broken down the process with which theyre judging how you see rather than just how they themself may "look" and given that all risk is equal to all people at all times within the market/price then it is the design of the trader that makes the difference .....not the print

 

[rnr]

@aus_trader
I thought, for future reference, it might be more appropriate to post a link in this thread rather than the ING thread.
The Pattern Site
The descriptions and research done in relation to the numerous chart patterns is extensive, to say the least.
The info on this site is invaluable.

 

[aus_trader]

@aus_trader
I thought, for future reference, it might be more appropriate to post a link in this thread rather than the ING thread.
The Pattern Site
The descriptions and research done in relation to the numerous chart patterns is extensive, to say the least.
The info on this site is invaluable.

I wasn't posting a specific chart pattern, it was general discussion about how the stock was in an uptrend while paying regular dividends.
The Pattern Site is interesting and has so many patterns that I didn't even know exited. Good reference I suppose.

 

[rnr]

I wasn't posting a specific chart pattern, it was general discussion about how the stock was in an uptrend while paying regular dividends.
The Pattern Site is interesting and has so many patterns that I didn't even know exited. Good reference I suppose.

Yes I totally get that as it was Ann who posted the chart. I'm assuming that Ann will answer your questions in relation to the pattern mentioned, however I thought it may be beneficial to have a link for future reference.

Cheers,
Rob

 

[Bernfeld]

In general, this works, but if it is used only in its pure form, without the use of additional filters and indicators, then the profitability will be close to zero.

 

[aus_trader]

In general, this works, but if it is used only in its pure form, without the use of additional filters and indicators, then the profitability will be close to zero.

What additional filters and indicators are you referring to ? Is it all technical or do you use some stock valuation or other fundamental ratios etc ?

 

[Bernfeld]

What additional filters and indicators are you referring to ? Is it all technical or do you use some stock valuation or other fundamental ratios etc ?

I use my own developed automated system. This EA scans 3 types of patterns: chart, candlestick, harmonic. Each pattern in my system has a certain weight and probability. It works as a point system. If the indicator value exceeds a certain value, this is a trading signal. The profitability of the trading system is 5-6% per year (an indicator for two years of use).

 

[tech/a]

In general, this works, but if it is used only in its pure form, without the use of additional filters and indicators, then the profitability will be close to zero.

I don’t know about that.
I use patterns without filters all the time
Profitability is a long way off zero.

I use my own developed automated system. This EA scans 3 types of patterns: chart, candlestick, harmonic. Each pattern in my system has a certain weight and probability. It works as a point system. If the indicator value exceeds a certain value, this is a trading signal. The profitability of the trading system is 5-6% per year (an indicator for two years of use).

5-6% however is a lot closer to zero.

 

[Bernfeld]

I don’t know about that.
I use patterns without filters all the time
Profitability is a long way off zero.



5-6% however is a lot closer to zero.

I agree. I understand that this is close to zero. But now I'm just happy that this is a stable result with a small profit. I am working on increasing profitability, constantly optimizing the strategy. So far, successes are modest.

 

[tech/a]

I presume your optimising indicators?

Why

 

[barney]

I use my own developed automated system. The profitability of the trading system is 5-6% per year (an indicator for two years of use).

Firstly, welcome to ASF @Bernfeld … Always good to see some new blood/input on the site, especially in regard to Technical analysis which is a topic many of us are interested in.

Please carry on posting your views etc

ps I read back through this thread and found some interesting info from some previous ASF posters who no longer post .....

Some of the information in the "archives" of ASF can be very enlightening

 

[aus_trader]

I use my own developed automated system. This EA scans 3 types of patterns: chart, candlestick, harmonic. Each pattern in my system has a certain weight and probability. It works as a point system. If the indicator value exceeds a certain value, this is a trading signal. The profitability of the trading system is 5-6% per year (an indicator for two years of use).

OK, so it's pattern based system with indicators for additional confirmation. At least it's making a profit consistently each year. That's better than most traders who lose money each year until they have no more trading capital left and they have to save up funds and start all over again.

As barney said, welcome and continue discussing your system and other interests and don't be shy to ask questions as well, I am sure ASF members will be happy to help.

 

[tech/a]

I use my own developed automated system. This EA scans 3 types of patterns: chart, candlestick, harmonic. Each pattern in my system has a certain weight and probability. It works as a point system. If the indicator value exceeds a certain value, this is a trading signal. The profitability of the trading system is 5-6% per year (an indicator for two years of use).

Im interested in what you code the chart patterns with?
Meaning which language.

EG something simple--how would you code a triangle pattern or a blow off top.
Or a support with our without volume.

If you don't use any of these could you post a simple example of what you do use?

 

[tech/a]

Pity this didn't keep going.
Scanning for patterns is near impossible let alone coding them to be used in a system.
To have someone who is doing that posting here is great.
I cant understand why when a few questions pertinent to the topic are asked
there is silence?

 

[Bernfeld]

I presume your optimising indicators?
Why

In order to automate the strategy using patterns, you need a complex mathematical model for calculating patterns. This is especially true for graphic patterns, since visually they look like a certain shaped figure, but in a detailed examination, the volumes and combinations of candles are always different. Therefore, I always perform optimization of calculations in order to improve the accuracy of the signals.

 

[Bernfeld]

Im interested in what you code the chart patterns with?
Meaning which language.

EG something simple--how would you code a triangle pattern or a blow off top.
Or a support with our without volume.

If you don't use any of these could you post a simple example of what you do use?

I myself do not write code, I am not a programmer. I work with a professional software development company.
MQL4 language, MetaTrader platform.

It will be difficult for me to explain in English. Briefly, in a nutshell, this happens as follows:
I analyzed about 1000 triangles with all OHLC data, the length and width of the triangles, and determined certain proportions. These proportions (they are not strict, but have certain ranges of values to be flexible) are introduced into the code of an automated trading system. When I talk about continuous optimization, I mean that I constantly adjust these parameters and ranges of values. This is done in order to reduce the ranges and improve the accuracy of the pattern.

 

[Bernfeld]

Pity this didn't keep going.
Scanning for patterns is near impossible let alone coding them to be used in a system.
To have someone who is doing that posting here is great.
I cant understand why when a few questions pertinent to the topic are asked
there is silence?

Why do you think so? You can encode just incredible details (at least for me). It very much depends on the qualifications of the programmer.
Here is an example of 1 component of my strategy (harmonic pattern)

 

[aus_trader]

Why do you think so? You can encode just incredible details (at least for me). It very much depends on the qualifications of the programmer.
Here is an example of 1 component of my strategy (harmonic pattern)

I have also seen some of the patterns used by traders such as triangles and harmonic patterns such as bats, butterflies, gartley etc. But it's a bit subjective I find especially with harmonic patterns and it could go against you quite a bit before heading in the right direction. So setting the stop loss can be quite challenging.