What is your most profitable pattern?

This is a discussion on What is your most profitable pattern? within the Technical Analysis forums, part of the Methods category; Humans see patterns where there are none. Ask yourself a question, how many institutional algo's do you think are based ...

View Poll Results: My most profitable pattern is:
H&S 2 6.06%
Flag 3 9.09%
Pin bar 4 12.12%
Triangle 3 9.09%
Something else 14 42.42%
I don't trade patterns 5 15.15%
I trade against them all the time 2 6.06%
Voters: 33. You may not vote on this poll

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Old Mar 30, 2013, 6:53pm   #25
Joined Sep 2010
Re: What is your most profitable pattern?

Humans see patterns where there are none.
Ask yourself a question, how many institutional algo's
do you think are based on chart patterns?
No I don't use chart patterns, maybe time patterns...
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Old Mar 30, 2013, 8:01pm   #26
 
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Re: What is your most profitable pattern?

ZEN archer started this thread
Quote:
Originally Posted by Liquid validity View Post
Humans see patterns where there are none.
Ask yourself a question, how many institutional algo's
do you think are based on chart patterns?
No I don't use chart patterns, maybe time patterns...
I'm pragmatic LV - if the patterns work, I would definitely use them without thinking too much about institutional algos' design
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Old Mar 30, 2013, 8:13pm   #27
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Re: What is your most profitable pattern?

Quote:
Originally Posted by ZEN archer View Post
I'm pragmatic LV - if the patterns work, I would definitely use them without thinking too much about institutional algos' design
If it works and turns a profit, fair enough.
Personally I think its just a coin flip variation.
When it 'works', how much is due to how you managed it?
Point I was making is chart patterns do not drive markets.
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Old Mar 30, 2013, 11:10pm   #28
 
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Re: What is your most profitable pattern?

Quote:
Originally Posted by Liquid validity View Post
If it works and turns a profit, fair enough.
Personally I think its just a coin flip variation.
When it 'works', how much is due to how you managed it?
Point I was making is chart patterns do not drive markets.
Perhaps it depends on what you mean by a pattern.
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Old Mar 30, 2013, 11:38pm   #29
 
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Re: What is your most profitable pattern?

The essential underlying basis of tech analysis is that, simply put - what happened in the past can be a guide what may happen in the future. If you accept this then it follows that certain ' patterns ' be they for eg PA, indicator, classic geometric chart patterns etc must exist and that some repeat.... To some extent Ta is self fulfilling and self perpetuating (to what extent no one really knows) and this will therefore apply to 'patterns' in the generic sense of the word, but whatever the reason -they do repeat..... I know from my edge that the set-ups I use as part of it (patterns by any other name) do repeat and I know in what circumstances they are historically highest in probability...applying sound money and risk management to these and constantly monitoring their on going performance metrics ensure that I trade only the highest probability 'patterns' - any profitably - over any given sample. It is clear to me that most traders do not have sufficient info about the ' pattern (s) ' they trade in this respect and therefore do not really know from the outset whether an edge exists for them - let alone give the time to learn to bring any profit gap that many encounter (as mark Douglas describes - the difference between having a proven/theoretical edge and actually trading it such that it results in a consistent profit over any designated sample for you. This difference if it exists - is generally mainly psychological.)

Re the poll - interesting as another poster above pointed out - that 7 now have voted ' something ' else without specifying. Why should they ?

G/L
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Old Mar 31, 2013, 12:00am   #30
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Re: What is your most profitable pattern?

Quote:
Originally Posted by bbmac View Post
The essential underlying basis of tech analysis is that, simply put - what happened in the past can be a guide what may happen in the future. If you accept this then it follows that certain ' patterns ' be they for eg PA, indicator, classic geometric chart patterns etc must exist and that some repeat.... To some extent Ta is self fulfilling and self perpetuating (to what extent no one really knows) and this will therefore apply to 'patterns' in the generic sense of the word, but whatever the reason -they do repeat..... I know from my edge that the set-ups I use as part of it (patterns by any other name) do repeat and I know in what circumstances they are historically highest in probability...applying sound money and risk management to these and constantly monitoring their on going performance metrics ensure that I trade only the highest probability 'patterns' - any profitably - over any given sample. It is clear to me that most traders do not have sufficient info about the ' pattern (s) ' they trade in this respect and therefore do not really know from the outset whether an edge exists for them - let alone give the time to learn to bring any profit gap that many encounter (as mark Douglas describes - the difference between having a proven/theoretical edge and actually trading it such that it results in a consistent profit over any designated sample for you. This difference if it exists - is generally mainly psychological.)

Great post.

Re the poll - interesting as another poster above pointed out - that 7 now have voted ' something ' else without specifying. Why should they ?

Cos everybody is looking for a shortcut / free lunch
Even if you did give them something of value, the majority would not see it.
I'm in the camp that says you have to experience it over and over and it's all part of the trading journey. Doing those reps over and over brings understanding.


G/L

But here's one for free.
Draw a line on a chart...if price goes above the line...buy...if it goes below...sell. Leave meaningful wiggle room for trade management.
No patterns required.
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Old Mar 31, 2013, 12:14am   #31
 
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Re: What is your most profitable pattern?

What if price is already above/below the line - ie it hasn't crossed it since you drew it - what then ?

G/L

Quote:
Originally Posted by counter_violent View Post
But here's one for free.
Draw a line on a chart...if price goes above the line...buy...if it goes below...sell. Leave meaningful wiggle room for trade management.
No patterns required.
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Old Mar 31, 2013, 12:27am   #32
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Re: What is your most profitable pattern?

Quote:
Originally Posted by bbmac View Post
What if price is already above/below the line - ie it hasn't crossed it since you drew it - what then ?

G/L
Sorry wasn't clear.

Assume price is below the line and crosses it up...then buy.
Opposite for a sell.

It can be death by a thousand cuts of course...but when the right one delivers, should be compensated.
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