I would go back over the old trades and see if they could have been managed any better to reduce some of that drawdown. Devise a method that tells you when the market in general is on the long side or the short side and trade with those signals.
--------------------------------------------- Hello btu12345 humble1 gave you very good advice above. Use it. Review past in detail before hopping around to new methods. agpilot
difficult to find much free info on RST patterns on the internet, however, i did see one chart and it looked similiar. I will try to find more info on it, and see if that is what I am using. It would be good to see if my research relates to kevin haggerty's as I might gain something.
Hi Lundy, FWTW, I believe your patern is very similar to this explained at Street Smarts. Check this Regards, CHAPTER 15 WOLFE WAVES This particular methodology is perhaps the most unique, effective trading technique I've (Linda) ever come across! It was developed and shared by a good friend, Bill Wolfe, who for the last 10 years has made a living trading the S&P His son, Brian, also trades it. Brian was the first teenager I've ever met who consistently made a good income scalping NYFE (Knife) futures from his apartment. Brian, now 21, has expanded into trading the Wolfe Wave in other markets. Bill's theory of wave structure is based on Newton's first law of physics: for every action there is an opposite reaction. This movement creates a definite wave with valuable projecting capabilities. This wave most clearly sets up when there is good volatility. With a bit of practice, it is easy to train your eye to spot these patterns instantly. The following rules will make sense when you examine the examples. (Please note the odd sequence in counting. As you will see, it is necessary- for the inductive analysis.) By starting with a top or bottom on the bar chart, we are assured of beginning our count on a new wave. This count is for a buy setup. We begin the count at a top. (The wave count would be reversed if we were starting at the bottom looking for a sell setup). 1. Number 2 wave is a top. 2. Number 3 wave is the bottom of a first decline. 3. Number 1 wave is the bottom prior to wave 2 (top). Point 3 must be lower than point 1. 4. Number 4 wave is the top of wave 3. The wave 4 point should be higher than the wave 1 bottom. 5. A trend line is drawn from point 1 to point 3. The extension of this line projects to the anticipated reversal point which we will call wave 5. this is the entry point for a ride to the EPA line (1 to 4). 6. The Estimated Price at Arrival (EPA) is the trend line drawn from points 1 to 4. This projects the anticipated price objective. Our initial stop is placed just beneath the newly formed reversal at point 5. It can then be quickly moved to breakeven. IMPORTANT POINT: You cannot begin looking for the Wolfe Wave until points 1, 2, 3, and 4 have been formed. Keep in mind that point 3 must be lower than point 1 for a buy setup. It must be higher than point 1 for a sell setup. Also, on the best waves point 4 will be higher than point 1 for a buy setup and lower than 1 for a sell setup. This ensures that absolute runaway market conditions STREET SMARTS - 89 - Point 1, 2, and 3 must already have formed. Point 2 must be a significant swing low or high. A trend line is then drawn between points 1 and 3. This projects where we should anticipate point 5.
you might also want to trade at some fixed hour only, here are some cousin of 'your' pattern http://www.trending123.com/patterns/reverse_symmetrical_triangle.htm http://www.trending123.com/patterns/bullish_symmetrical_triangle.htm btw, there could be patterns more easy to recognize, such as pennant or flat top triangle
thanks dan05, I have seen those before and I beleive that that is the same pattern although it stresses different points. Many of the same charts would be picked up by the wolfe pattern as by my pattern. Perhaps the wolfe pattern even narrows it down further. One thing that confuses me about the wolfepattern is the targeting using trend lines. While I do think that those lines show up alot in stocks, I dont think they are an actual "factor" or a cause of anything. I put much heavier weight on the prior support/resistance of the previous trend. nkhoi, I dont know why I chose this pattern. However, I scan 600 of the same stocks (trade relatively liquid options) every day in about 45 minutes to find this pattern. So I think i'm pretty quick at recognizing it. I will eventually try to do the same strategy with the other patterns out there.
Hi Lundy, Do you scan with a automatic pattern recognition software? or you do it your self? If auto, can you recomend any soft? I've always found partner recognition a very interesting approach to trading, but as I could never back tested it, I've switched to automatic trading based on system dynamics theories that for me where easier to back test. Still I'm interested in any pattern recognition software you might suggest. Thanks, Dan
this is sell pattern it is a combination of h&S and short the bounce under 20MA or 34MA, in general as long as it make kind of round top and then it bounce under MA should do this book goes over many setups with clear illustrations http://www.amazon.com/gp/reader/0471381357/ref=sib_dp_pt/104-7626881-0520762#reader-link