As we know, technical analysis(TA) is indeed a big deal in the world of trading. In the retail world TA is used even more. I find TA interesting(I don’t necessarily mean that in a negative way) and I am not here to question TA’s effectiveness or whatever. Just a simple question: Popular types of TA are chart patterns, indicator signals and price action strategies. Are there well known verifiable(backtest-able) chart patterns, indicator signals or price action strategies, with win-rate consistently far greater than that of a coin flip(e.g 70% win rate)? Obviously for such “well known” strategies(if they exist in the first place), I would assume would have horrible risk reward ratios(resulting in negative expectancy). You can include such strategies with negative expectancies. However, strategies that involves averaging up/down, grid, martingale and other forms of position size manipulation should be excluded.
yes, with wider stops. So the RRR >1 is not based on per trade but based on time period say 1 month, where RRR is greater than 1.
Yes. You can have a 70% win rate if the reward-risk ratio is very lousy / low. But you have to top up your trading account many times. Talk about day trading futures, you should aim for RR ratio of > 3:1 and ~ 50% win rate. Do not think a 50% win rate is easy to achieve. Even if you use TA/chart pattern/price action/backtest-able/miracle indicators/ blablabla, You have to sweat blood to achieve that win rate
TA is only a tool, it's not a strategy by itself. With an hammer, anybody can build a house. But only a few have the ability to do it.
There are books on the subject (and prolly multiple topics here), my suggestion pick one and read it.
So In it’s self there is no proof that indicators or chart patterns can consistently win(lose) much more(less) than 50% of the time?
No, it can be but you have to define what is 50% of the time. It is based on at least 1 month or longer then it can 50% of the time.
The % win rate use alone has no significance. You can have a strategy with a 97% win rate and still losing money. You can have a strategy with a 30% win rate and making tons of money. [Win rate] + [R:R] is what you should be looking for.
Double top/bottom with RSI divergence. But this is only the entry point, so where you exit determines the outcome of the trade.
I meant 50% win rate like a coin flip. Can indicators be shown to either consistently improve or worsen win rate of a strategy which should be ideally be 50/50? I know win-rate can be altered by skewing the RRR. However I have no interest in that. Take for example: For a certain underlying I use a certain TP and SL(it could be any value). Let’s say I have 2 separate account and I trade the same underlying with the same TP and SL in both accounts. However in one account I randomly place trades and in another account I use some form of TA. Would I always arrive at the same profit or loss after thousands of trades in both accounts? I don’t care if the TA is profitable or a massive losser but with same underlying and targets would I always get the same result for random entry as TA?