Not quite a "pattern," but I like a big sharp plunge, a fat red candle--a nice 10%-er. One that triggers the uptick rule. No fancypants pattern-matching needed; the move is crystal-clear: a vertical down-move. Usually the reason can be discerned, which is not always the case for many moves. Did they miss earnings? Was there a plane crash? An explosion? Did the CEO get fired? Did Steve Jobs die? Something big happened, and it will make the headlines. This forms a good basis for whether the dip should be bought (or sold!). The shape of the dead cat bounce also tells a lot. It's a big shake-up; an earthquake, and good associated volatility that's relatively readable. There's a lot of extra price information in a plunge for an educated eye; it's a high-percentage play. (ps This of course assumes that I'm not actually long on the instrument before the plunge XD) (pss Don't call me a bottom-feeder)
I don't use patterns to trade. For me they are just information only. I find them too subjective. What looks like pattern A today might look like pattern Z tomorrow or to a different person.
I would say failed counter-trend "breakouts". The smart players just love to test these levels before going the other way... I know you love Jazz too so here is one of my favorite piece, Funky Broadway (Jimmy Smith). (Scotch on the rocks is recommended, for maximum pleasure hahahaha ). Keep up the good work Mr Calhoun.
There are many ways to trade with charts and patterns and I mostly trade with combining chart patterns with fundamentals and news.
no pattern has a win rate of more than 60% as good as random i have tried all patterns for 30 years.......from eliot and other well known patterns documented in BUllkowski. BUT WHAT IS BEHIND THE Pattern ......what causes these patterns is bull and bear strength but no one looks at this aspect to trade you need to know where the buyers are and where the sellers are and how strong they are. you need this information and it is out there ...public......but no one is looking for it.....because their heads LIKE MINE WAS FILLED with stuff from expert technical analyst who 'teach '. patterns, set ups, rsi ema and all that jazz are just like jazz.......in one ear ...OUT the other. do not go down this road ....of patterns, waves, order flow......95% do and you know what happens to them. markets are driven by buyers and sellers: patterns are just dust thrown up in their wake.........search for what is causing the dust......do not focus on the dust. i know this will flaggergast most of you here........but take it from someone who has been there and done that.........or find out for yourself ......technical analysis is not rubbish but 99% of it is. i know patterns do give some success but that is a illusion
"A Failed Countertrend trade can become a Great Trend Trade." If you can find and run stats on a written set of instructions which prove that situation's probable outcome over a sizable population of trades, especially one that allows for a setup that gives you a stop so tight it squeaks, say maybe a pullback to a hammer at support, then maybe you can pullback some frogs to your pond. Tradex - Jimmy Smith - Man you are a Too Much Go On With Your Bad Self!