Pennants and Wedges vs. Symmetrical Triangles

[Tano]

Can someone graphically the difference between these 3 patterns ? These patterns look identical to me.
I have read a few sites explaining the differences but they dont make sense or seem to contradict each other.

Thanks in advance.

 

[Valued]

Don't worry, it doesn't mean anything. It's just astrology on the stock market. If you can't tell the difference between various patterns it's most likely because there is no difference/doesn't matter.

It doesn't make any sense to see patterns and shapes in pricing. You will get more value from just looking at a simple line graph and noting how the market has reacted to various news/conditions. The idea that there will be a reversal or continuation once a pattern is made is completely ludicrous. If a reversal or continuation happens it's because a stock is perceived to be cheap/expensive or desirable/undesirable and this may create a shape or pattern but this is a by-product to what is actually going on. It's an excuse not to form qualitative analysis.

 

[jdenhaan]

Don't worry, it doesn't mean anything. It's just astrology on the stock market. If you can't tell the difference between various patterns it's most likely because there is no difference/doesn't matter.

It doesn't make any sense to see patterns and shapes in pricing. You will get more value from just looking at a simple line graph and noting how the market has reacted to various news/conditions. The idea that there will be a reversal or continuation once a pattern is made is completely ludicrous. If a reversal or continuation happens it's because a stock is perceived to be cheap/expensive or desirable/undesirable and this may create a shape or pattern but this is a by-product to what is actually going on. It's an excuse not to form qualitative analysis.

With so many traders vs investors on the market these days, I'm starting to think that patterns can be a self-fulfilling prophecy. People start acting on them in a way that make them happen.

 

[burglar]

Don't worry, it doesn't mean anything. It's just astrology on the stock market. If you can't tell the difference between various patterns it's most likely because there is no difference/doesn't matter.

It doesn't make any sense to see patterns and shapes in pricing. You will get more value from just looking at a simple line graph and noting how the market has reacted to various news/conditions. The idea that there will be a reversal or continuation once a pattern is made is completely ludicrous. If a reversal or continuation happens it's because a stock is perceived to be cheap/expensive or desirable/undesirable and this may create a shape or pattern but this is a by-product to what is actually going on. It's an excuse not to form qualitative analysis.

If I said I disagree, most likely you will put me on ignore.



FA is a bet on a company's performance.
TA is a bet on shareholders' activity!


QA is a security blanket.

 

[burglar]

From Investopedia:

Definition of 'Triangle'

A technical analysis pattern created by drawing trendlines along a price range that gets narrower over time because of lower tops and higher bottoms. Variations of a triangle include ascending and descending triangles. Triangles are very similar to wedges and pennants.

Triangle

 

[Valued]

With so many traders vs investors on the market these days, I'm starting to think that patterns can be a self-fulfilling prophecy. People start acting on them in a way that make them happen.

I agree that it does become a self-fulfilling prophecy sometimes. I believe people's perceptions of certain market actions (in addition to news of the company etc) drives trends. I also believe in timing markets when you want to buy in for the long term since why pay more per share if it looks like a share is trending down to a support position. I think buying good companies with good prospects at the right time is far better than buying at a new high just because it's under intrinsic value. I am not blind to technical factors.

@burglar I would not put you on ignore just because you disagree with me. I just don't like the idea of reading into shapes and thinking a particular shape means something specific. I think it's far better to perform your own analysis on a case by case basis of what the market is doing at a particular time.

 

[Tano]

Thats the problem. I know what a triangle is, but then it looks the same as a Pendant or Wedge.

 

[Valued]

See if this thread helps you:

http://forums.babypips.com/newbie-i...different-between-wedge-triangle-pennant.html

 

[tech/a]

Don't worry, it doesn't mean anything. It's just astrology on the stock market. If you can't tell the difference between various patterns it's most likely because there is no difference/doesn't matter.

Clarity of pattern is important. Copy book isn't in my view After 20 yrs. of T/A

It doesn't make any sense to see patterns and shapes in pricing.

Actually it does! Crowds behave very similarly in similar situations. Yell fire and the crowd will bolt for the door.
Yell free money and the crowd will bolt towards it. Release news either micro or macro and the crowd may react similarly in groups at various times forming a repeatable pattern---like a triangle---

You will get more value from just looking at a simple line graph and noting how the market has reacted to various news/conditions.

Don't know about MORE but your right.

The idea that there will be a reversal or continuation once a pattern is made is completely ludicrous.

Don't know about that either.
I do it all the time trading the FTSE.
Many systems including my own operate on pattern triggers---profitably.

If a reversal or continuation happens it's because a stock is perceived to be cheap/expensive or desirable/undesirable and this may create a shape or pattern but this is a by-product to what is actually going on.

True and if you recognise this you can profit from it.

It's an excuse not to form qualitative analysis.

No its another form of analysis.

 

[burglar]

... @burglar I would not put you on ignore just because you disagree with me ...

Glad to hear.

... I just don't like the idea of reading into shapes and thinking a particular shape means something specific ...

I've been at ASF too long to aspire to that view.

Repeated behaviour causes repeated shapes.
Shapes can be sharp, or no, depending on the net effect of all participants.

If a shape gives you a 51% chance, it is better than the casino.
If you do study shapes, you will find some are way better than 51%.

By the way, I don't see patterns till someone superimposes red tramlines over the chart!

... I think it's far better to perform your own analysis on a case by case basis of what the market is doing at a particular time.

Commendable

 

[CanOz]

I think what allot people misunderstand about one benefit of Technical analysis is that it lets the punter enter the market with a defined risk. So, if in the example of a triangle formed in a raging bull market, an entry at the breakout point of the triangle with a stop below the apex has a defined risk. If the trade is executed like this over and over and stops are trailed behind the market, you can have a profitable means of trading patterns as long as you have a positive expectancy.

We've been down this road before, its not all about predicting anything, just defining your risk. Even reward can be quantified to some degree as triangles and flags have a measured move that can be applied to anticipate the target price.

Nick Radge has results trading a pattern based discretionary system to prove that trading patterns does work. His results are real results based on a number of markets, not just equities.

The pattern site by Thomas Bulkowski is a good resource for research into trading patterns. Many of the past patterns that performed well do not perform as well anymore as the markets change and so do the participants.

Trading is not about predicting, its about anticipating, risking, taking small losses and larger wins. Its the math that does the work, after a consistent application of an edge.