You missed the point again DT. You have fallen in to the same trap that everyone else so far has. You are defining a pattern or indicator by its ability to produce profits using it mechanically. Whether or not it does that is a qualifier you have placed on it. I can't stand it! When the very next post denegrates the question and follows the same course as the previous posts the silliness has to stop. I quickly remember why I don't post much. More Hints: What does a triangle display? What does a flag display? What does a stochastic display? What does an macd display? Do they continue to display it?
Until traders figure out it is the TRADER, not the pattern, there will continue to be 95% to 98% losing traders.
That's easy. The trader. It is the actions of the trader that form the pattern or indicator. Okay, here is the answer. All of the patterns and indicators continue to work. Here is proof. A triangle and flag and chart patterns of this nature form because of indecision. Neither fear nor greed is overwhelming the other. At least since Edwards and Magee these patterns have been manifested time and again. They represented indecision then, they represent indecision now. The stochastic was developed to show Lane's observation that the closing price of a bar changes in relation to the range of the bar as a rally or selloff nears its completion. It did it then, it does it now. The macd was developed by Appel to demonstrate changes in momentum of price over time. It did it then, it does it now. Whether or not a trader can use the information successfully is indeed, on the trader. Unfortunately, or fortunately, no one was able to provide one single pattern or indicator that no longer works. The question remains open, despite having the answer. Looking for specifics here. Other than my posts, there are no specifics mentioned yet.
I don't want to intentionally change the subject of this thread, but MACD works -- or has ever worked? I have every video tape and special report ever issued by Gerald Appel concerning MACD, some of which are unavailable anywhere at any price. I have studied MACD for many years -- until I gave up in frustration several years ago. I challenge anybody to show me a mechanical implementation of MACD that has been profitable out of any batch of at least fifty consecutive trades.
Scaleout I agree that as standalone buy/sell signal generators most if not all indicators and patterns fail when used mechanically. But the macd continues to demonstrate a reduction in momentum within a trend.
Jordan, I truely believe you have a totally distorted view of patterns and indicators, no wonder you did not get an answer you liked. The purpose of paterns and indicators is in trying to anticipate the future while you seem to be using them to explain the past. It is totally useless (though accurate) to say that a triangle or flag represents indecision. Of course it does, so what? How does it help? What good does it do? It is just like saying if the price went up there were more buyers then sellers, if the price does not change supply is equal to demand. Absolutely correct but totally useless statements. The value (or perceived value) of patterns is in predicting that triangles more often than not break out in the direction of the existing trend. They work of fail in context of anticipating the future, it is absolutely meaningless to evaluate them based on how they explain the past and this is what you seem to be doing.