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Pattern recognition software

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Market Wizard
Sarasota FL
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Big Mike View Post
I would recommend you read Evidence Based Technical Analysis by David Aronson before you spend any time on these patterns.

Or if you a true believer, you can look at Suri Duddella has made patterns work for him in several (formerly BMT) webinars. Hint, it's not the patterns that make him successful...


ratfink View Post
... There are many thousands of traders, yet there are many hundreds of millions of investors, most of which have never seen a chart, let alone know how to spell TA.

The patterns, cycles, waves and ratios that exist in highly liquid cash markets do so simply because of the ebb and flow of human optimism and pessimism.
The patterns I see everyday, all day are no different now than they were a century ago, just faster and with more tactics and strategies employed to game them or attempt to defeat them.

My suggestion to @brags is not to bother with pattern recognition software. The people who like/use/believe in patterns generally say that recognizing them is a matter of judgment. The people who disbelieve in them generally say that they are simply subjective. Either way, I would say that if it's so hard to see them that you need a program to spot them, is there anything really there?

So learn how and whether to use them, if you find them helpful, but don't spend time and money on software that is supposed to see them for you....

The larger point is whether there is any point to them at all. Unfortunately, there are True Believers and True Disbelievers, both equally certain of their positions. We had the same clash recently in a long thread discussion on fibs. I don't know how many minds were changed, although some common ground did get uncovered after a while, in the area of practicality: use what works (for you.)

It is possible to occupy a middle ground.

@Big Mike has the position that pattern traders can be very successful, but (as in his post above), it's not the patterns that do it for them.... It's in the trader's management of the trade, of the context, and of themselves. And other aspects of the trader, more than the method. (Not trying to speak for you Mike, and apologies if I got something wrong about your views here.)

@ratfink has the position that there are patterns that exist objectively, and if you see them you can do well with them. You also need the trader's management of the trade, of the context, and of themselves. (Not trying to speak for you either, ratfink, but I think you will agree.)

The total disbelievers think it's all hogwash, and believe they have proved it by running a lot of backtesting (or, usually, reading about someone else's backtesting.) Then they have their own answers about what works, and, often, add the trader's management of the trade, of the context, and of themselves.


There is something in common here.

As to what actually works, well, try it and see.


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