The key word in your sentence is THEORIES. Basis of speculation is to form an hypothesis based on certain facs/ beliefs and trade them. based on +Ve results or -Ve results you manipulate your position on that particular trade. Unlike scientific experiments - a loosing trade can result in profit or what you may call success !!
Patterns change too much these days and relying on only a few can stunt your progress and cut you profits. I use different theories or methods as I put together my trade plan for the day. It doesnt work all the time, but it does give me more option to choose from when my direction isnt correct.
I don't think patterns have really changed at all. I've been using the same sequences of price bars, OHLC and volume for over a decade. Same sequences that worked then work today. Maybe some other patterns that I'm not familiar with have changed but I can say confidently that not all patterns have changed.
I agree. Certain chart patterns were present over the last 90 years at least and still function the same way today.
Seykota mentioned other than trend following method, he uses "special pattern" in his trading program, a real myth!
Less reading and more observing. Create your own original thoughts and quit regurgitating things that others have said. Get creative and stop reading so many darn trading books!
I started in 1978 and have backtested patterns going back to 1920's, generally in wheat in the earlier years. What most traders don't realize is Price = emotions, and peoples fears has not changed in 90 years, losing money has same emotions no matter how you slice it up. More traders made money before the computer cause they had to rely on actually charting by hand, that's how I learned, it was a long process before to buy/sell in futures markets and it cost min $125 for a roundturn, so day trading was not an option. Too many who go into trading are too quick to open an account and they want one way to get in/out, well isn't that cute, not going to happen. One price pattern, one indicator or one theory seldom is enough to have a trading plan. Most are very good to "alert" you there be a possible good setup soon. Take Elliott wave, one of my favorites, three waves for trending, 2 for retracing. And the safest wave with most of the trend is usually wave 3. But it alerts me that after waves 1/2 have happened, if the push has reversed wave 2, I can look for a mini retracement to get in for wave 3. And if you can count that you have missed wave 3, the market is over extended. Price patterns like tri-angles, so many people use them, it is too much fun to stick it to the younger traders who get in too early. I often am waiting a few ticks beyond a trendline to take the other side, many are and push the market back to where the stops are of the weak hands, and then it is a great place to reverse, so I am getting in so much better than younger trader originally did and at some point when my trade going profitable, the younger trader will enter again forcing the market to go even further in my direction and then I will take profit. GAWD I love this game. Patterns and theories still work, but you have to work to make them a better tool.
I don't just read and believe whatever other said. I read and think. Seykota just had one book and it is not even popular and I have no way to find it anywhere near my location. It is just an interview and his FAQ. All of what he said make good sense for me and logical. I think the main different between 1. some classical pattern / special own create pattern and 2. wave/gann theories are that 1. can be backtested and proved to at least work in histsory but 2. can never be proved. It is logical that the best pattern is not the class kind and have to find out by ourselves through math testing.
Why cost you $125 for a round turn? That is a monthly salary for a normal worker even some university graduates in China.
Why do you believe Elliott wave really work? I have learn the whole Elliott wave theory and I think it is too objective after applying it for too many times. It is just....I see what I want to see. I see what I feel it should be...