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

  #51 (permalink)
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josh View Post
I could have sworn there is a chart pattern with that name but maybe not


There was a band called twisted sister...if my memory is working.

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  #52 (permalink)
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Wide and loose bull flag on the daily chart of the EUR.JPY - a break above the upper trendline (currently about 126.50) will likely mean, at the very least, a retest of the 127.70 high. A rally to 132 - 137 is to be expected, should the patern play out its historical odds. But then agaion, "odds is odds," as my grandpop always said, which means you got your odds on favorite, but sometimes even favorites lose.


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  #53 (permalink)
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This might be apostasy to the technical analysts here but I believe that when you combine market fundamentals and understanding the reasons behind chart patterns that you will get the best results.

A few posts in this thread have dismissed the Head & Shoulders pattern from the classic text by Edwards & Magee. I feel that is very short-sighted because in that very same chapter they explain in detail the market psychology behind the head and shoulder pattern.

If you can understand the context and the reasoning behind why this particular pattern of selling and buying occurs then rather follow the H&S pattern blindly whenever you see it, you can be more discretionary in your application while increasing the probability of success.

Let me give you a current example - Take the 4Hour EURJPY chart. You can see a clear Head and Shoulder pattern there. It could be straight out of a textbook. However I would not short the EURJPY here simply because the fundamentals have *not* changed and therefore the momentum behind the EUR longs is still there. I might trim some longs and tighten stops but I would never straight up short the EUR at this point even though we can see a classic Head and Shoulder pattern.

So to recap - Don't blindly follow the chart patterns. Only enter a position based on a chart pattern if the fundamentals confirm it.

Good Luck!

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  #54 (permalink)
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Traderji View Post
So to recap - Don't blindly follow the chart patterns. Only enter a position based on a chart pattern if the fundamentals confirm it.

Good Luck!

Thanks for the fundamentals heads up and the reminder that E&M did stress it.

On a similar but tangential note that has probably already been mentioned but worth repeating it is also important to only follow the patterns if they are sitting on or under important levels (sup/res/fib/prev h/l, session bounds, gaps, etc, etc anyway, otherwise its a no-man's land 50-50 the first time around.

Cheers

Travel Well
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  #55 (permalink)
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Traderji View Post
So to recap - Don't blindly follow the chart patterns. Only enter a position based on a chart pattern if the fundamentals confirm it.

I'm sure it's possible for good trading to result from fundamentals, but it's not necessary. I never use fundamentals or market news, I only go on price behavior.

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  #56 (permalink)
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As previously mentioned chart patterns are not very effective unless "context" is taken into account. I have spent a great deal of time studying charts over the years and I've always tried to take the easy way out by just saying, "well if this happens, then I buy/sell." I never asked myself what kind of market are we in. Are we stuck in range? Has the market been trending? Where were previous areas of consolidation? Once I started asking myself these type of questions, I began to avoid trading every chart pattern on the board. I have also been studying order flow and auction theory and how to apply it to my entries and exits.

Also, be very careful with joining trading companies. I've been with a few over the years and they have all been a big disappointment. They very rarely spend the time trying to teach you how to trade. You are much better off trying to find a mentor that will take the time to sit down with you and answer your questions. Someone that will be honest with you and not try and sugarcoat things.

Good Luck!!!

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  #57 (permalink)
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cygnetnoir View Post
Wide and loose bull flag on the daily chart of the EUR.JPY - a break above the upper trendline (currently about 126.50) will likely mean, at the very least, a retest of the 127.70 high. A rally to 132 - 137 is to be expected, should the patern play out its historical odds. But then agaion, "odds is odds," as my grandpop always said, which means you got your odds on favorite, but sometimes even favorites lose.

Same trendlines as drawn in the above referenced post. Price dropped to and bounced from the lower trendline, to the tick. Still nothing to trade, unless you are a range trader, aka masochist. No reason to think price will break higher or break lower, but it worth tracking nonetheless. It is a bull flag, albeit very wide and loose. When it comes to flags, high and tight beat wide and loose by a wide margin.


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  #58 (permalink)
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Could silver be traded successfully using chart patterns like ascending triangles, flags, 2B, rising wedges and symmetrical triangles with a minimum 3 to 1 pay off?
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  #59 (permalink)
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Can some indicators help validate direction if MP's and VSA's are chinese to one with limited abilities?

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  #60 (permalink)
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whatnext View Post
Could silver be traded successfully using chart patterns like ascending triangles, flags, 2B, rising wedges and symmetrical triangles with a minimum 3 to 1 pay off?
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Whatnext,

Absolutely. Kimble charting is all about trend lines and channels.

Ken "COTtrader"

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