"The best patterns are the ones you know. I think that a trader is best served to learn a few patterns very well, like picking a major in college." When I trialed your chat room this was the one thing you stressed over and over: become an expert at identifying one pattern, trade it consistently and only trade when you feel you have an edge. I took your advice and don't do as many trades as I used to but my winning percentage has gone up dramatically as well as my confidence.
Traps and fakeouts are my favorite, it's the only time in trading where you KNOW where traders stand!! There is nothing more predictable then a trader in pain Good Luck and Good Trading, -Bo Yoder
JPM is a good one... all the breakout players jumped in just in time to eat the setup and flush! You KNOW breakout players entered because you could see them on the tape. So when they squeezed they will panic and give you a nice trend to trade with. Good Luck and Good Trading, -Bo Yoder
There are a couple that I like, although they might not be patterns in the sense of triangles and flags, etc. The Pristine setup is fairly good. It is a 3-5 bar pullback swing trade method. I also like the NRB setups or patterns, if you will. Both these rely on prior bar breakouts for entry.
When I do breakouts, I am darn careful.. as Bo mentioned a few posts ago, breakouts tend to fail a lot, and you can profit from this as in his JPM chart example... But if I am to do a breakout, I want the balance of probabilities on my side... although I don' t have much time for Larry Williams, there is one pattern of his that I do use... the pattern is the OOPS formation and when it comes up I will not hesistate to play a breakout... my entry constraint is tougher than Larry's, however... in my modified OOPS buy I want to see the price open up lower than yesterday's low and power through yesterday's high... this shows me that there is real strength going on... I will then enter at the high of the day which has been OOPS'd (the blue line on the chart)... http://www.ttrader.com/mycharts/display.php?p=4690&u=candletrader&a=candle charts&id=198
Uptik, that appears to be a rising wedge, a bearish continuaton pattern. Also, note how many times the continuation move from te breakout of the pattern is nearly the same amount as the move before the pattern... often called a measured move.