=============== Trader Vic; Well its a bull market you know, assume that chart is in a bull market, much , much, much different than a bear market.....;; exits are not very important at all, unless you are trading/investing too big + most youngsters do I did ,2,LOL Also exits on weekly charts + monthlies matter more. Also ''its a bull market you know'' probably will not really mean much, to you ; till you have been in a bear market /bear trend, measured in months, weeks, 200 dma. Wisdom is profitable to direct
The priceactionlab raises question marks. While the PFs in the examples are high, the examples use data with less than 500 trades. This could easily be curve fitting no?
Use ET search because there's lots of threads here at ET by users of priceactionlab. You should re-open those threads or start a new one with any questions about them. http://www.elitetrader.com/vb/search.php?s=
A KYM kind of set up, ascending or descending support/resistance, a breakout,a retest as opposite: entry. Powerful and great rrr
They use portfolio backtests to increase the trade sample size. This is also one of their cross-validation methods. It is a very interesting concept that I'm studying. Price patterns do not generate many historical trades but you can test them across many markets more easily than chart patterns.This is an example from the website. T. Bulkowski has done something similar with chart patterns, It is hard to find many of the same formations in the history of one stock. In the case of systems with price patterns you get many trades when you combine them into one big system. This is an example. I am researching for methods of combining these price (micro) patterns in ways that maximize entry probabilities. This is an interesting subject and also mathematical.
I have heard about this "tape reading" thing many times in the past but haven't seen any convincing definition for it. Are you implying subjective interpretation of price action by looking at a quote screen?
I read the L2 and T&S. There is some level of subjectivity which makes tape reading very hard to automate. I traded Sprint today. The tape looked about the same every time it dropped a few cents. I pretty much hit the bid in that all day with 2000-5000 shares at a time. When the book started to lean the other way and it started printing the offer I quickly got out.
If by "pattern" you mean what is usually meant by pattern, it's unlikely that they will do you any good. However, if you're accustomed to tape reading and know how to read the cascades that lead to climactic action, you can see these in a chart quite easily. Trading them in either direction and/or the lower-high/higher-low tests that generally occur thereafter will put you in a better position than most, who are generally paralyzed while trying to figure out (a) what's going on and (b) what if anything they ought to be doing about it.
A chart alone can only represent a simplistic view of historical volatility. Further studies may include: 1. Volume 2. Options
============= Probably a good reason for that ''bent'' I assume original poster had discerned the difference between uptrend[bull market] + downtrend [bear market]; old uptrend + young........................................................................................................................... Those could be figured out on tape alone; but a picture[ candle chart] is worth 2 thousand words. Believe it or not a picture[candle chart] is a fast way of handling lots , huge amounts of data,LOL.Balance that with Bright Trading warning every ship wreck has a wet chart,LOL