Book on Percentages & Probabilities of TA Setups

Discussion in 'Educational Resources' started by DisciplinedHedg, Apr 25, 2003.

  1. Does anyone know of a book that gives percentages of various technical setups? ie. the probability and return of prices 1-5 days after a high volume reversal, etc.

    There are tons of TA books out there but I haven't come across one like that. Also, I've seen these kinds of stats in the magazine TA Stocks & Commodities, but is there a book that contains this information?

    I'd like to get an idea of which setups are higher probability setups and for what time frame they are most optimized.
  2. prox


  3. Thanks for the replies both of you, both recommending books by the same author.

    Have you guys read these books and found them to be useful? What did you think about them?
  4. I have his "Encyclopedia of Chart Patterns" book. I consider it worthless.

    His testing is highly questionable, as he doesnt even rigorously define what it is that he is testing. The statistics he presents are completely meaningless, as he talks about things like "average percent rise" without ever relating it to the underlying volatility.

    To answer your original question, I have yet to see a good book on this subject. And to be honest of the people who have done a meaningful analysis on the subject, I doubt any would publish their results. My recommendation is to skip these books, and do the testing on your own.

  5. BKuerbs


    I do not know books that systematically research TA, but there are some articles:

    scroll down to #26 "Foundation of Technical Analysis". If you do not understand the math, skip it. The conclusions are quite interesting.


    Bernd Kuerbs
  6. ges


    I've got the Encyclopedia of Chart Patterns.

    I don't think it is completely useless...just mostly.

  7. Best to do your own testing, statistics or probabilities based on your own trade methodology

    Besides...any book info will be old news along with being based on the author's trade methodology.

    If the author discloses his/hers trade can determine if his/hers research is suitable for your trading.

    For example...I have a close personal friend that has done statistical work, probabilities on about 7 common intraday candlestick patterns.

    However, I couldn't really use the info because his trade methodology and definition of what a particular pattern is was different from my own.

    Ever since...I do my own testing based on how I trade.

    Simply...the difference in traders definitions will produce differences in what we consider to be low or high patterns or whatever...

    via being different types of traders.

    Regardless if its about triangles, head-n-shoulders, slim jims, 2B bottoms, ma crossovers, pivot points, candlesticks...whaterver.

    Thus, when I research something...its based on what I consider to be a particular pattern because I will make my trade decisions based on my definitions and not his/hers.

    Now...if your talking about mechanical systems...then the book will be of some use if you used the same mechanical system the author used to come up with his/hers numbers. your own research regardless to what info you find in a book...

    you'll have much more accurate info because it'll be based on your trading methodology.

    As usual...just my opinion.

    P.S. Anybody that likes intraday candlesticks...I'm currently testing White Hammers in a particular intraday price pattern...

    I'll share my results in about a month (doing it little by little because of other work) with anybody interested in intraday candlesticks...

    results will be based on where I normally place my initial stops, trailing stops and scaling out at specific profit-targets.

    PM (private message or email) me towards the end of May for the results. I'll include a few chart examples of the trade signal.

  8. Foz


    Good post, NihabaAshi. Well said.
  9. Thanks for the reply, NihabaAshi. Thoughtful points which I'll take into consideration...

    Goodluck on the intraday testing...
    #10     Apr 27, 2003