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Is it all mostly about chart patterns
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Is it all mostly about chart patterns

  #31 (permalink)
Market Wizard
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I think that the 'chart pattern' argument is somewhat of a semantical one.

On reading OP, I though "uggghhh chart patterns" because that brings to mind all the stuff already mentioned.

On the other hand, I have absolutely no issue seeing a market put averaging 6-8 tick pullbacks and then looking for an entry on a 6-8 tick pullback.

I also have no great issue with looking for shorts above value and longs below value.

I don't use LVNs but I can see the sense in them.

I do tend to avoid trading double tops because everyone else is doing the same thing. On the other hand, I do like the market to pierce the overnight high and find nothing up there for a trade back to the opposite end of the range.

I could go on - but I am pretty sure I'm using patterns there. I am looking at the chart and trying to figure where we are and I am pretty sure I'm looking for stuff that I have seen before.

I think you could call that patterns but on the other hand, it's not 30 year old "even works on womens average bra size over the years charts" sort of stuff.

Like I say - it's a semantical thing. When we hear patterns, we think Head & Shoulders and all that tired old stuff.

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  #32 (permalink)
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kwak76 View Post
Hello,

I'm very new at trading. In fact so new that I'm about to join a trading company but I have to give a contribution. The reason being is because I feel like I need someone to hold my hands in the learning curve.


Anyway, I been doing simulation and realize is it all about chart patterns when it comes to picking. I read about volume and open interest but it's all about charting . Wondering if people just rely on chart patterns ? And I think that the only way to really understand chart patterns is to look at it for hours and hours.

IMO it is all about pattern, but in the sense in the 1000's of hours of trading paper you've put in you begin to understand what pattern means, the only evidence of which is that you are starting to win more than you lose.

There are "do-it-yourselfers" and "expert followers" according to Kevin Davies (a member on this forum). My preference is to trade a system that we develop ourselves but that takes experience. My experience has been all profitable systems have very much in common and I owe my start to Barry Burns (would not necessarily give him my email address these days).

Therefore my opinion is, if you can find a legitimate system (one that you can confirm is proven profitable) it makes sense to learn from it. Once you understand trading, develop your own system. Risk real money as little as possible in the process, work hard. Belonging to futures.io (formerly BMT) is a good start in that direction.

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  #33 (permalink)
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Cosmos View Post
hv heard that though chart patterns are good for trades, but around only 50
% success ratio of pattern trading has been noticed.

That could be said for probably 95% of all trading strategies

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  #34 (permalink)
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tigertrader View Post
Not intended for anyone in particular, but...

Hopefully, the reason why one joins this forum, is so they can heed the advice from within, and learn from those who actually know and understand what they are talking about,

the only way anyone could verify this is through a demonstrable trading record (with real money) over, probably at least, a two year period.

Most people aren't going to have this kind of track record, so by definition most people on the forum should not be giving advice.

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  #35 (permalink)
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mcteague View Post
From the other threads I have read, I think Big Mike trades mostly futures without any indicators. I am sure that works fine for him. He seems like a fairly advanced trader with many years of experience. But would you seriously suggest that to a beginner.

that's how I learned to trade oil futures. I learned by watching the ticker and comparing the behavior on the ticker to a simple 15- or 30-minute HLC bar chart and finding out where the congestion areas (support/resistance) are and how to tell when breakouts occur.

i have never used technical analysis, or chart patterns, or anything of the sort.

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  #36 (permalink)
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Big Mike View Post
When I hear people say "chart patterns", I envision they are talking about things like H&S, Flags, Pennants, etc.

I don't think those things are reliable at all, and recommend reading the book I mentioned.

If you are talking about trend lines, channels, double top's, etc -- then I agree, it is important. I classify this as price action + support/resistance.

Mike

A double top, a triple top etc are classical chart patterns.

Channels are also a chart pattern.

Trendlines are what identify patterns such as wedges flags rectangles etc, and also double tops (the trendline is horizontal and call a resistance level.

Keep your mind in the future, in the now.
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  #37 (permalink)
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Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Maybe the concept of patterns was created long ago as a way of learning to see what the market may be doing, or to help explain price action. For example, a H and S pattern could be viewed as a market making HH and HL and then there is a LH, or in the case of a H and S pattern, the right shoulder. If it's an inverted H and S then the right shoulder would be HL. In either case, just because one recognizes a "pattern" doesn't necessarily indicate a trade, does it? My understanding of a H and S pattern is that one is supposed to wait on the break of the "neck line" also known as support, and then wait for price to come back and test that broken support, now called resistance.

Even when price is in consolidation people call it a consolidation "pattern". We can call it balancing if we want. I don't think it matters what you call it. Call it a Bob pattern. In answer to the question is it about the chart pattern? No, it's all about a traders psychology. If one has their head up their butt psychologically, it won't matter what method one trades, or what they call it. I speak from experience. If there is a lot of fear and greed in my head I will loose 99% of the time. If one is angry, or want's revenge, they will lose. So, no, it's not about chart patterns, value areas, indicators, fibonacci, or even good old support and resistance. I think it's about having ones mind right to trade. Being calm, confident in ones approach, confident that one has some sort of edge at times, accepts the fact that they will have losing trades and can let it go. Accepts that there may be uncomfortable feelings, but has the ability to focus on the process of trading and not the feelings or negative thoughts.

D

P.S.

Here is a beauty of an H and S on the the 60 minute crude chart. There is also what I would call a Spring. A spring could be considered a pattern, I guess, but it is a trade setup where price dips below support and is rejected and "springs" higher. I actually was looking at charts last night and was "anticipating" this scenario and taking advantage of it if it played out. I did not take advantage of it because psychologically I'm fearful of losing, so I don't even get up in time to watch. Anyway, don't want to get too far off topic.

d


Last edited by David_R; February 11th, 2013 at 04:39 PM. Reason: added chart
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  #38 (permalink)
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Chart pattern software can be built around a variety of technical analyses:

Support and Resistance
Fibo levels
head and shoulder, cup and handle patterns, etc.
trend line breakouts
volume analysis

Chart pattern software looks great in a look back. In real time, the patterns often repaint themselves based on one of the above.

Yes. I would agree with Big Mike. S/R and delta volume levels are the key.

Volume and price always return "to the scene of the crime."

COTtrader

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  #39 (permalink)
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COTtrader View Post
Yes. I would agree with Big Mike. S/R and delta volume levels are the key.

To clarify, I do not use delta.

Mike

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  #40 (permalink)
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Personally...


I read tea leaves or rely on the Oujia board. What is Delta?

The dean said.."No More Delta."


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