Flags and Pennants

[sammy84]

Has this thread become more popular than the breakouts thread? Personally I find the reliability on these patterns alot higher than your typical breakout.

 

[skc]

ABY again. The length of the flag is some 30% of the share price, so not necessarily a low risk set up.

 

[skc]

Has this thread become more popular than the breakouts thread? Personally I find the reliability on these patterns alot higher than your typical breakout.

True true. It has been quite reliable. I think the high success rate probably has more to do with the huge bear market rally rather than the patterns themselves.

Interesting to see what the success rate will be like from now on.

 

[Sean K]

Has this thread become more popular than the breakouts thread? Personally I find the reliability on these patterns alot higher than your typical breakout.

Many of the breakouts were pennants, or flags, so hard to tell what's more successful.

Agree with skc.

My anacdotal conclusion here is that pennants and flags have a much higher probablility of success in an uptrending market. We're now up 20% plus since the 'bottom'. A very strong bear bounce/rally. Of course these formations will produce these results in such an environment.

It's written in the theory somewhere also.....

 

[johnnyg]

BTA again anyone? Huge gap is now closed. So far on this thread gap play + flag has a good hit rate.

Anyone get on BTA? Took a little while longer to form but even with a conservative entry you'd be @ 1R already.

 

[skc]

Anyone get on BTA? Took a little while longer to form but even with a conservative entry you'd be @ 1R already.

I got in at $1.14 and scratched it after a week or so. Didn't like where the broader market was heading, didn't like where the swine flu news was going and didn't have the patience, as you said, took a little while longer than it should. Also didn't notice the new flag/pennant forming after I left the trade.

Didn't do a lot of things really...

 

[Jack Payback]

Just out of curiosity, does anybody use these patterns for forex trading?

It seems to have been stocks only in this thread.

 

[db96]

CDU

This one is making a move today.

 

[catman]

ASL potential upside breakout out of the pennant to compete an inverted head and shoulder pattern.

 

[beamstas]

Anyone get on BTA? Took a little while longer to form but even with a conservative entry you'd be @ 1R already.

Looked at it
Didn't like it

 

[Kryzz]

Possible short? Rising wedge with SGM, declining volume.

Shaun.

 

[bowman]

Three more speccies - THX had a go at breaking out yesterday but failed.

 

[johnnyg]

Looked at it
Didn't like it

Reason being? (Nick's post possibly?)

 

[beamstas]

Reason being? (Nick's post possibly?)

Not a post on the ASF

 

[Sean K]

Not a post on the ASF

Why post anything here that you can't share your reasoning?

Would help the rest of us.

 

[beamstas]

Why post anything here that you can't share your reasoning?

Would help the rest of us.

Sorry i was just answering his question

If you want to know why i didn't like it is that it is already at "half mast". A consolodation that is made a long way down the "mast" like that will generally fail before it reaches new highs.

 

[johnnyg]

TECHNICAL: One thing that a computer simulation can't do is help you understand when and why a pattern will fail. In the mid-90's I spent 2-hours per day, 7-days per week for 18-months eyeballing specific chart patterns. Doing it by hand allows you to see things that would not normally stand out. Amongst many things two congestion pattern failures stood out; the first was when we get a parabolic rise followed by a extremely large triangle. These tended to break against the trend rather than with the trend. The other was when we saw a tight consolidation after a parabolic rise but one that consolidated below the absolute highs, which is what KAR is doing. Think of a flag flying at the top of the pole vs. a flag flying at kind of half mast. When they fly at half mast we tend to get a failure. KAR is not flying at the top of its mast here so I'm more inclined to think it will fail and either start lower or morph into another pattern such as a flag. This is not to say that other bullish patterns can't come forth, they may well do. But with the current information I wouldn't be looking for KAR to break higher from this triangle.

Not this one Brad?

EDIT - Beat me to it.

 

[beamstas]

Not this one Brad?

Is that on here?
Anyway that's the sentence but i didn't read that. It was part of a video (where it is discussed in a bit more depth)

Thanks Johnny
Brad

 

[johnnyg]

Follow up on HDF. Currently @ 1.5R using a conservative entry. You could now move the stop to B/E. The Gap is of slight concern.

What about WAN. Upside down Flag? (insert correct name here) :

 

[db96]

What about WAN. Upside down Flag? (insert correct name here) :

What about a bottom's up flag. It is quite bearish. Look for a target of 3.70 if it breaks that lower trend line.