PATTERNS -- So These REALLY Work???

Discussion in 'Technical Analysis' started by al c., Mar 16, 2003.

  1. al c.

    al c.


    I am new to this forum and would like to get some opinions.

    As you know there are many different "patterns" that are recognized as valuable and repeating chart patterns. Some that we all have seen are the "Head & Shoulders" or the "Wedge", "Symetrical Triangles", etc.

    Well, I am an experienced trader and have used many so-called patterns. If one could quickly "spot" them and know how to trade them -- then CONSISTENT profits should follow !

    It really should be that easy. Find a proven Pattern -- Determine the Risk -- and then Enter the trade when the pattern has completed. SIMPLE right?

    Well, if patterns really work and you are an experience trader then Consistent Profits should result. (Providing you are also following a proper money management system).

    I would welcome your comments on this. Since I believe most of us make trading way to complicated and lack a disciplined system.

    I also would ask: What patterns do you use and what do you think are the MOST successful ones?

    I WILL Gladly SHARE my experience with patterns for the benefit of all those interested. I am very willing to BACK up my post here with actual trading charts and examples.

    The INTENT of this Thread: To compare patterns and RESULTS. If some are "non-believers" I can post "Real Time" ala the wonderful Seanote.

    I hope you guys have some interest in Sharing and Learning together.
  2. MACD


    Thanks alc for starting this thread.

    Yes, patterns do work. Been using them for years and profitably. I would welcome any of your "tricks" for maximizing profits utiling patterns.

    Glad to see that you are willing to make calls live as this will show us what you are doing and how profitable your system really is.

  3. MACD


    In my last post I meant "utilizing" patterns...

  4. I use patterns exclusively when swing trading.

    In my experience intraday patterns are no where reliable as daily bar patterns. THe only patterns I trade are the continuation patterns of stocks exhibiting directional strength in either direction.

    These include flags and triangles (wedges). Once in a while.. I will trade stocks breaking out of tight small bases.

    The cleaner and clearer the pattern the more relevant. If the pattern is not obvious right from the start.. then I would not trade it.

  5. Digs


    I am in the last stage of building my personal Stock scanner for over 350 good volume stocks.

    This allows me to view hundreds of charts in a 2 to 3 min time scan.

    This is what I believe a stock takes on a form of nature like any living animal.
    - Some times its wild and scary
    - Some times its lame and easy

    A stocks form is dependent on how the traders view it at the current time.

    The FORM of a stock I define as...
    - the measure of TRUERANGE, ie HIGH and LOW of the bars
    - the frequency of false run ups/downs and breaks
    - how spikey the OHLC looks to the eye
    - Length of price moves
    - A few other things thrown in the stew as well...

    The better the form the better the chance a pattern will be successful.

    What maybe OK one day may not be the next. Hence my pursuit of a customise scanner to find the above quickly with minutes.

    NOt easy, and I havent finished it yet, so I cant say that I have it working.

    But you understand my thinking, some charts are EASY money one day and where are they the next day...if I can find them realtime then I would be consistently profitable.

    Its is very difficult to write progamming CODE to find triangles (..or any pattern) with "good form". It has not been done yet to a successful degree (in my humble opinion) because each one is different ....

    MY POINT...each stock is like a live animal in a herd of animals ( say ZEBRA), at least 20% of the herd are LAME and EASY (say they are the young and the sick) which are targets for a predator (say LION). Find these ones and hunt them down and profit from them...LIKE A LION hunt your prey and hope to enjoy a good kill ratio to attack..,....

    Ok getting a bit weird...hope you get my point and trading style.

    Good Luck
  6. al c.

    al c.

    Thanks for all the replies so far. MACD, attached is one of the patterns I regularly trade and it worked beautifully this past Friday morning as you can see by the result. The patterns work in all time frames.

    Digs, obviously you are light years beyond my technical abilities with a computer. I would never have the patience to even begin to learn how to write computer programming code. The only thing I wonder is how you could possibly get a computer to interpret all the possible variables of a given set of patterns then, to only identify those variables which are acceptable to trade. Best of luck to you.
  7. al c.

    al c.

    Sorry, MACD I must have done something wrong on my last attempt at attaching a file which contains the chart I mentioned.
    I will try again. If it does not work this time, I can email it to you if you would like.

    al c.
    • ac01.png
      File size:
      49.6 KB
  8. Interesting analogies...

    wonder how long you have been trading and how long you have successfully utilized these "animal" patterns... ?


  9. What pattern is that?

    Its definately not a classic one.

  10. Kermit


    al c.

    Among the many often-repeated price patterns that exist out there, I prefer to use flag formations. They manifest themselves quite frequently not only on any given time scale but on other larger frames as well so, for instance, I can play a flag pattern on the 2-minute time scale off of a larger flag that might appear on the 8-minute time scale. To me, they are just technically simpler to use.

    My experience has been that patterns also have to be viewed in the context of it’s overall environment like its proximity to known support or resistance zones which might have bearings on how price might unfold after the pattern is complete. Sometimes, of course, the pattern can setup under the “best” of conditions and still fail; situations where the market will simply have no follow-thru and moves against me instead. These are times that I will look to reverse positions for setups going the opposite way or look to re-enter in the original direction if the larger time scale pattern still points favorably (my timing might have just been off).

    #10     Mar 16, 2003