Which chart pattern to stick to?

[Trembling Hand]

In answer to your question, I guess you could say I derived my discretionary approach by watching Youtube videos.

I came across videos where people say that they like to start off with a daily charts to see the big picture first, then drop down to lower time frames e.g. 4hours, 1hour, 30mins.

I noticed many of them end up trading the 5minute charts if it is moving in the direction of bias established on the daily chart.I just assumed pretty much everyone did it this way!

So you tested nothing. You spent no time objectively observing the market. You just assumed that because its on YouTube it works?

Can you point me in the right direction?

This is back to my original point. TA doesn't work, charts don't work. Either commit to learning how markets move and develop your own unique approach that makes sense to you or give up. There is me pointing you in two different and opposite directions, anywhere in-between the two is a waste of time.

 

[tech/a]

What he's saying is either
Test extensively any patterns you perceive as
Giving you an edge to display that they actually do.
Then provided the market your trading doesn't appreciably
Alter to the time in which you tested it --- you'll have
Confidence in trading that or those patterns

OR

Observe enough charts to instinctly recognize what price
Is doing.
I trade the DAX I can clearly see when it's smashing through resistance
Or support or that small micro pattern in a continuation or volume is smashing in
Pulling it up from it's current fall or rise.

WhenI'm discretionary trading if it's not crystal
Clear as my intuition is yelling get on this--I wont trade it.

Anyway back to the beach
I like Byron Bay.

 

[barney]

WhenI'm discretionary trading if it's not crystal
Clear as my intuition is yelling get on this--I wont trade it.

Genuine question here Tech ...... not so much for my own clarification, but to hopefully add value to the thread, .... When your discretionary trading is "crystal clear" and yelling at you to either buy or sell, how much wider do you run your initial stop (ie. wiggle room because you know you are on a good thing)

 

[tech/a]

Genuine question here Tech ...... not so much for my own clarification, but to hopefully add value to the thread, .... When your discretionary trading is "crystal clear" and yelling at you to either buy or sell, how much wider do you run your initial stop (ie. wiggle room because you know you are on a good thing)

I don't have one if it comes back on me I'll click out.
5 or so ticks is plenty.
If you watch a DAX session and it takes off you'll see what I mean.

I'll only watch the first hr or so when I'm in my home office.
Only trading when I am lucky enough to see it --- feel it building.
If in the time I'm at the computer nothing happens I'll leave it for the night.
I miss lots because I'm not watching.
Have better things to do.

 

[barney]

I don't have one if it comes back on me I'll click out.
5 or so ticks is plenty.
If you watch a DAX session and it takes off you'll see what I mean.

Yeah I trade the DAX regularly, but only with paltry positions sizes to suit my level of confidence

5 Ticks is a very small window of risk given the gyrations of the DAX .... If you are trading discretionary, do you recall the furthest you have let it run against you when you are convinced you are on the right side of the trade?

The reason I ask this is I was on the wrong side of it tonight but held on to turn a losing trade into a winning trade ... Basically my Entry was crap (as usual), but my analysis said it would turn ... Fortunately it did

Just as a side issue ... Entries are the basis of good trading in my humble opinion ... without good entries on a regular basis, we are doomed to become ordinary traders .... curious on others thoughts on that

 

[VSntchr]

Just as a side issue ... Entries are the basis of good trading in my humble opinion ... without good entries on a regular basis, we are doomed to become ordinary traders .... curious on others thoughts on that

Agree with you. Although crappy entries do force you to think on your feet and innovate your trading. They also might hone your EXIT skills...not that I am in any way suggesting that poor entries are the way to go !!!

 

[Trembling Hand]

I'll only watch the first hr or so when I'm in my home office.
Only trading when I am lucky enough to see it --- feel it building.
If in the time I'm at the computer nothing happens I'll leave it for the night.

This is what the newly minted TA enthusiast is missing. After 1000s of runs you have the ability to read a market and know with a high likelihood of what opportunity is presented. Either taking risk or passing well before any chart pattern sets up.

The newb with his very low level of skill just wants to see something. What they end up seeing is patterns that has no edge but give them an excuse to do something..........

Head and shoulder anyone? :behead:

 

[Wysiwyg]

Just as a side issue ... Entries are the basis of good trading in my humble opinion ... without good entries on a regular basis, we are doomed to become ordinary traders .... curious on others thoughts on that

Good entries are only so after the fact. Our money, from stop loss forward, is at the mercy of the market once that ticket is bought. Look at those breakout trend trading strategies. Often the price will retrace back to or below the breakout. Sometimes never to make a new high for some time hence the lower percentage accuracy or "good entry". In my opinion good entries after the fact are feel goods and some feeling of control over price movement but this is far from the case. Insider trading will provide for a good entry or exit as the case may be but for us honest toilers, your guess is as good as mine. The fact is not so much a good entry but using experience and/or statistics to close at a price which, over time, leaves you with an increasing account balance.

 

[subterfuge]

I often hear people who claim to make consistent money daytrading, say that charts are useless, as is everything else that the retail crowd are aware of (time+sales/DOM/etc etc etc)
You need an actual 'edge' to make money trading and you don't get an edge by using the same stuff as everyone elses

 

[avion]

subterfuge, where are you based, you are replying at 2:30am... my patterns all look a bit more fuzzy at that hour, tried it once or twice :goodnight:sleeping:

 

[tech/a]

This is what the newly minted TA enthusiast is missing. After 1000s of runs you have the ability to read a market and know with a high likelihood of what opportunity is presented. Either taking risk or passing well before any chart pattern sets up.
The newb with his very low level of skill just wants to see something. What they end up seeing is patterns that has no edge but give them an excuse to do something..........
Head and shoulder anyone? :behead:

This is true and when you've done it yourself you can associate well.

I often hear people who claim to make consistent money daytrading, say that charts are useless, as is everything else that the retail crowd are aware of (time+sales/DOM/etc etc etc)
You need an actual 'edge' to make money trading and you don't get an edge by using the same stuff as everyone elses

I'd re phrase it a little
You don't get an edge using the same stuff the same way as everyone else.

 

[Triathlete]

I understand entry is only a small part of the complete trading cycle. I understand the exit is very important as is money management. I remember reading somewhere in one of Nick Radge's articles (and elsewhere, most likely here) to be consistent, whatever you decide to do... be consistent with it and stick to it.

This brings me to starting this thread. I would like to concentrate on learning a couple of chart patterns to enter trades. The problem is there are so many chart patterns to follow and learn. So hard to stay focused!

Some advice on this please
For an entry. I am thinking of focusing on learning head and shoulders, I read this is one of the more reliable pattern signaling a movement in either direction. The other is MACD and 'High and Tight Flags'. H&TF for uptrend.

Looking forward to some words of wisdom!

If you are wanting to become a skilled T/A then the basic patterns you require to know in my opinion are:

1. Double top
2. Triple top-very bearish signal
3. Double bottom
4. Triple bottom - very bullish signal
5. Accumulation pattern
6. Distribution pattern
7. Continuation pattern
8. Rising flag pattern
9. Falling flag pattern
10 Rectangle pattern
11.Reversal patterns - as you have mentioned, Head and shoulder ( top of the market ) or an Inverted Head and shoulders ( bottom of the market) although these take many weeks , months and in some instances even years to form.
If you are looking for techniques to get into and out of the market..it is far easier to use a combination of:

1. Trend lines - 2 closes above or below the trend line depending on whether you want to take a long or short trade.
2. Dow theory- mainly used for short term trading or to use this in combination with trendlines to lower your risk.
3. Gann swing -provides an easy guide to the strength and direction of the market-never trade against the trend!!
Of course their are other techniques and some T/A use price and time analysis to confirm there trades so that the probabilities of having a successful trade is more in their favour then the markets.
In this game we need the probabilities in our favour so using all our knowledge will help us achieve that.

Becoming a skilled T/A takes many years of practice and analysing charts and not something that happens overnight!!

All the best!

 

[tech/a]

If you are wanting to become a skilled T/A then the basic patterns you require to know in my opinion are:

1. Double top
2. Triple top-very bearish signal
3. Double bottom
4. Triple bottom - very bullish signal
5. Accumulation pattern
6. Distribution pattern
7. Continuation pattern
8. Rising flag pattern
9. Falling flag pattern
10 Rectangle pattern
11.Reversal patterns - as you have mentioned, Head and shoulder ( top of the market ) or an Inverted Head and shoulders ( bottom of the market) although these take many weeks , months and in some instances even years to form.

How have you come to this conclusion. I note you are into a course module 3 or 4
So how is it that believe these are a requirement?

If you are looking for techniques to get into and out of the market..it is far easier to use a combination of:

1. Trend lines - 2 closes above or below the trend line depending on whether you want to take a long or short trade.

Common course rhetoric with no proven substance.

2. Dow theory- mainly used for short term trading or to use this in combination with trendlines to lower your risk.

You need to revisit DOW THEORY.

3. Gann swing -provides an easy guide to the strength and direction of the market-never trade against the trend!!

Could you show me a REAL-TIME example of this? Sounds classy but in reality again is hind-site rhetoric.
The stuff basic courses with no substance (Practical application) are filled with.

Of course their are other techniques and some T/A use price and time analysis to confirm there trades so that the probabilities of having a successful trade is more in their favour then the markets.
In this game we need the probabilities in our favour so using all our knowledge will help us achieve that.

How then do YOU determine this.
Again a REAL-TIME example would be helpful.

Becoming a skilled T/A takes many years of practice and analysing charts and not something that happens overnight!!

With you at Module 3 again how do you know that which you have written?

Tech/a I'd re phrase it a little
You don't get an edge using the same stuff the same way as everyone else.

 

[Triathlete]

How have you come to this conclusion. I note you are into a course module 3 or 4
So how is it that believe these are a requirement?


Common course rhetoric with no proven substance.



You need to revisit DOW THEORY.



Could you show me a REAL-TIME example of this? Sounds classy but in reality again is hind-site rhetoric.
The stuff basic courses with no substance (Practical application) are filled with.



How then do YOU determine this.
Again a REAL-TIME example would be helpful.



With you at Module 3 again how do you know that which you have written?

Hi Tech A,
I am actually into module 8 ( whether that is good or not in your opinion) so I also have basic understanding on Elliot wave principles and as you also know nothing in trading is 100% we can only go back and test your trading strategy on charts to see if it is working out for us and if you believe in your strategy going forward than take the trade so hopefully you achieve what we have set out to achieve which is to be profitable traders. I actually like checking my charts with Elliott wave as the principles of that concept and if I am correct and ( you can correct me if I am wrong) that a wave 3 is the safest wave to trade on?... as I like to learn from others with much more experience than I.
I am actually finding your responses to some other posts quite informative so I am building my knowledge all the time from this forum. Thanks.

 

[tech/a]

So you've tested your statements?
Testing looking back on charts is useless.
Forward testing is best.
I doubt you've done either.

 

[tech/a]

Let me get to the point.
My bluntness appears personal---not meant to be.

There are more questions than answers.

(1) How and at what point can you identify a Pattern/Trend line/Wave 3 in Elliott.
(2) How do you trade it and at what point do you make that decision to Buy/Sell or Hold..
(3) At what point in your trade do you KNOW your wrong/right?
(4) How long does a pattern signal stay valid. Is it still valid while your in a trade in a week/month---?
(5) Is trading a pattern in isolation best.
(6) Why are the patterns mentioned above better than others---why are they even mentioned?
(7) Is there a better time frame?
(8) How can I find a definitive answer to the OP's question---rather than a generalized list.
(9) Why trade patterns at all?
(10) If not patterns what?

I have my own answers to these questions but am interested in others if they have an opinion.

If your doing a course or you've traded technically long enough you should have an idea.

 

[Porper]

If you are wanting to become a skilled T/A then the basic patterns you require to know in my opinion are:

1. Double top
2. Triple top-very bearish signal
3. Double bottom
4. Triple bottom - very bullish signal
5. Accumulation pattern
6. Distribution pattern
7. Continuation pattern
8. Rising flag pattern
9. Falling flag pattern
10 Rectangle pattern
11.Reversal patterns - as you have mentioned, Head and shoulder ( top of the market ) or an Inverted Head and shoulders ( bottom of the market) although these take many weeks , months and in some instances even years to form.
If you are looking for techniques to get into and out of the market..it is far easier to use a combination of:

1. Trend lines - 2 closes above or below the trend line depending on whether you want to take a long or short trade.
2. Dow theory- mainly used for short term trading or to use this in combination with trendlines to lower your risk.
3. Gann swing -provides an easy guide to the strength and direction of the market-never trade against the trend!!
Of course their are other techniques and some T/A use price and time analysis to confirm there trades so that the probabilities of having a successful trade is more in their favour then the markets.
In this game we need the probabilities in our favour so using all our knowledge will help us achieve that.

Becoming a skilled T/A takes many years of practice and analysing charts and not something that happens overnight!!

All the best!

If you really want to go down this alley... continuation, reversal patterns and moving averages etc. then all this information is free on hundreds of websites. Same goes for Elliott Wave. There are books galore on all this stuff. Why would anybody waste thousands of dollars on a mickey mouse course to learn what is readily available...and in a lot of cases more in depth. For Elliott just go to Elliott Wave International, there are free courses that explain the theory in depth. Robert Miner (Dynamic Trader) is another good one.

 

[Triathlete]

Let me get to the point.
My bluntness appears personal---not meant to be.

There are more questions than answers.

(1) How and at what point can you identify a Pattern/Trend line/Wave 3 in Elliott.
(2) How do you trade it and at what point do you make that decision to Buy/Sell or Hold..
(3) At what point in your trade do you KNOW your wrong/right?
(4) How long does a pattern signal stay valid. Is it still valid while your in a trade in a week/month---?
(5) Is trading a pattern in isolation best.
(6) Why are the patterns mentioned above better than others---why are they even mentioned?
(7) Is there a better time frame?
(8) How can I find a definitive answer to the OP's question---rather than a generalized list.
(9) Why trade patterns at all?
(10) If not patterns what?



I have my own answers to these questions but am interested in others if they have an opinion.

If your doing a course or you've traded technically long enough you should have an idea.

Hi Tech A,
I do not take your statement personal as I know we all have our different views. What I was actually trying to do was mention what I had learnt and for those that may be new to trading was to go out and look up these patterns , Trendline entries/exits ,Dow theory, Gann swing, Elliot wave etc as they may never heard of these theories and so on through books and websites where there is plenty of information that people can find and to see if using these principles would help there trading.
Even after learning these principles if we have two people trying to trade they would most probably come up with two different scenarios. That is all I was trying to do.

 

[dlineinvestor]

lol ....
seems bonkers is a stirrer one post and he has all the heavy weights typing it out.
each to his own, what ever works just use it.
Who cares what other's say !
"bonkers you out there ... lol
"now let me just re tweak the settings in my macd, rsi, sma and SS,
for tomorrow"
:shoot:

 

[CanOz]

I don't think TA is rubbish, but its only a tool to provide some context. Its just price action, history to be exact. Learn all you can while watching one or limited markets as much as you can...Screen time.

Then use it to frame your ideas about the market and what it could do next. You'll know you are onto something when it occurs more than half the time. After that, manage risk...Try gathering stats on your performance applied to what you think to be an edge...

CanOz