Is there any good statistical data on Technical Analysis Patterns?

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Old Mar 22, 2013, 7:23am   #1
 
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Is there any good statistical data on Technical Analysis Patterns?

Hi,

First post on this site. I've been trading stocks/options for a few years with mixed success. I've read up a lot on technical analysis, but have always been frustrated with a couple of aspects - first, unclear rules for identifying patterns, even simple things such as support and resistance. Second, a lack of statistical evidence supporting the use of those patterns. It seems to me that something like a 'descending triangle', for example, can be defined mathematically and subsequently backtested. From this, you could derive some statistics on the pattern's effectiveness. Can anyone provide a good resources for this kind of thing?

watkins
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Old Mar 22, 2013, 8:02am   #2
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Re: Is there any good statistical data on Technical Analysis Patterns?

http://thepatternsite.com/
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Old Mar 22, 2013, 8:52am   #3
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Re: Is there any good statistical data on Technical Analysis Patterns?

Quote:
Originally Posted by watkins View Post
Hi,

First post on this site. I've been trading stocks/options for a few years with mixed success. I've read up a lot on technical analysis, but have always been frustrated with a couple of aspects - first, unclear rules for identifying patterns, even simple things such as support and resistance. Second, a lack of statistical evidence supporting the use of those patterns. It seems to me that something like a 'descending triangle', for example, can be defined mathematically and subsequently backtested. From this, you could derive some statistics on the pattern's effectiveness. Can anyone provide a good resources for this kind of thing?

watkins
Very good question , no AFAIK there is no statistical evidence to support patterns profitability , just examples from historical charts "cherry picking" , IMHO i don't believe the competitiveness in the markets will allow such a profitable pattern to exist , but it is good to learn them and to add them to your trading arsenal .
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Old Mar 22, 2013, 8:55am   #4
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Re: Is there any good statistical data on Technical Analysis Patterns?

Evidence based technical analysis by David Aronson is worth a read. It doesn't contain any data, but at least it might give a better understanding of the problems you'll encounter if you go down this route
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Old Mar 22, 2013, 10:10am   #5
 
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Re: Is there any good statistical data on Technical Analysis Patterns?

Encyclopedia of Chart Patterns is a book I wasted my money on. You might find it useful though. It is full of pictures and statistics.

http://www.risk-management.cz/pictur...rtpatterns.jpg
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Old Mar 22, 2013, 1:12pm   #6
 
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Re: Is there any good statistical data on Technical Analysis Patterns?

Brock et al (1992) seems to be referred to quite a lot in the literature.

Google: empirical evidence of technical analysis for example. There's a great deal of academic literature for and against.
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