Chart Patterns

This is a discussion on Chart Patterns within the Swing & Position Trading forums, part of the Methods category; Originally Posted by EnlightenedJoe A key element of darkie's pattern is that it must be on the left side of ...

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Old Dec 9, 2017, 12:31am   #9
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Originally Posted by EnlightenedJoe View Post
A key element of darkie's pattern is that it must be on the left side of the chart and the pattern is confirmed through passage of at least 12 month of time.
the key element was the schlong..
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Old Jan 15, 2018, 5:27am   #10
 
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double bottoms and tops, cup and handles constantly come up intermediate term, and intraday. stay away from loose patterns.
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Old Jan 15, 2018, 6:42am   #11
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double bottoms and tops, cup and handles constantly come up intermediate term, and intraday. stay away from loose patterns.
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Old Jan 15, 2018, 8:22am   #12
 
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the first pattern looks loose to me, while the second pattern looks tight, sharp, and near textbook symmetrical. it can get a little subjective sometimes, you'll have some losers. but if you got a 2 to 1 profit to loss ratio on a trade, better to tolerant a few losers, rather than miss out on winners. you'll notice the market and sector index(gray line) is confirming the technical weakness on the second pattern too.
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Old Jan 15, 2018, 8:27am   #13
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the first pattern looks loose to me, while the second pattern looks tight, sharp, and near textbook symmetrical. it can get a little subjective sometimes, you'll have some losers. but if you got a 2 to 1 profit to loss ratio on a trade, better to tolerant a few losers, rather than miss out on winners.
Can you please explain the meaning of "loose" and "tight". Thanks.
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Old Jan 15, 2018, 8:43am   #14
 
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Can you please explain the meaning of "loose" and "tight". Thanks.
did you read this statement i added? this is a big clue on whether the pattern will succeed or fail.

you'll notice the market and sector index(gray line) is confirming the technical weakness on the second pattern too.

the sector and market indexes are sloping up during the first pattern.

loose basically just means sloppy. tight means closer to looking like it were neatly handwritten.
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Old Jan 15, 2018, 3:17pm   #15
 
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Old Jan 25, 2018, 1:00pm   #16
 
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Chart Patterns

I've been using chart patterns for a long time. They're actually quite easy to trade. However they all have to qualify to be a good trade.

I have 3 favorite qualifiers that a chart pattern has to pass.
  1. MACD or a variation of it
  2. Stochastic RSI indicator. Separately they work good but this one is very good
  3. Keltner Channels work pretty good to.
Divergence is a must do with the indicators and the Keltner Channel just takes a bit of practice.

The best, and most profitable chart patterns are
  1. 123 Top/Bottom
  2. Bull/Bear Flags
  3. Various array of Triangles.

The Flags can be a great help in a breakout of almost any chart pattern.

There's an example of a flag on the chart I attached. Simply measure the length of the pole and use the top of the pole as a breakout point. Add the length of the pole to the BO and that can gives a good estimate of the next move.

I should note that the 2 indicators shown are:
  1. Top --- ADX +- D1
  2. Bottom --- Aroon
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