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Pattern recognition software

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Market Wizard
Birmingham UK
Trading Experience: Intermediate
Platform: NinjaTrader
Broker/Data: E2T/Rithmic
Favorite Futures: YM
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bobwest View Post
@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.)

Yes, that's correct.

Patterns exist, not because of what traders see, and not because of what they think they will do or what they think the market will do, but simply because of what institutions, investors and traders actually did do. They come embodied with all the emotion that was used in making thousands of decisions and then carry the emotion that becomes consequent on the trader's chosen action and the market's subsequent movement. I'm not just talking waves or fibs here but many valid swing based and time based s/r ranges and structures.

TA can never tell you what a market is going to do, but as a building block of context it can certainly help to understand how far, how fast and in what style or manner a market might move if it chooses one route over another.

You don't need volume or concepts of supply and demand to explain a market either. For sure a market is made up of buyers and sellers doing a whole lot of buying and selling, but absolutely none of that ever explained why anybody chose to buy or sell anything at a particular level other than the smartness of the hands on either side of the trade. Last week I removed the last vestiges of quite sophisticated volume studies that I had clung to for many moons, finally realising they are just another illusion. My charts have never looked clearer or felt better and the decision at the one place that counts just got simpler.

Now I just need to hold that trade, and that's what 2016 is for..


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