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; Originally Posted by Shakone Perhaps it depends on what you mean by a pattern. Exactly, for the purposes of this ...

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 31, 2013, 7:24am   #33
Joined Sep 2010
Re: What is your most profitable pattern?

Quote:
Originally Posted by Shakone View Post
Perhaps it depends on what you mean by a pattern.
Exactly, for the purposes of this thread, I take it to mean pin bars, H&S etc.
I think those kinds of patterns are largely BS as they are a product
of the time series they show up on.
A pin bar on a 1 hr chart is not a pinbar on a 4hr or 1500 tick chart for example.

Gann angles is another one - product of the time series chosen.
Basically anything that is dependent on a specific time frame for its
existence is vacuous.

If anyone using them does have success, I'd say its more to do with
trade management, and experience of price action as a filter.
As stand alone methods in isolation they have little to no worth.

In terms of overall patterns, yes they quite clearly exist.
Tick volume footprints.
Time of day - open and close are the obvious ones,
about as rigid a pattern as you will find, same with other static time events.

Correlation patterns, arb in other words, those patterns aren't necessarily
chart based.
Say an ES/YM/NQ/ER2 stat arb basket, AAPL, GOOG could be used as pointers
to the NQ element using VWAP.
So yes its entirely dependent on the types of pattern you use.
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Old Mar 31, 2013, 8:54am   #34
Joined Jun 2011
Re: What is your most profitable pattern?

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Originally Posted by counter_violent View Post
Cos everybody is looking for ... free lunch
Not everyone. Personally I am more interested to see if people actually have the lunches they say they have. On the internet, it's easy for people to say they have this lunch or they have that lunch. Also I find it especially unconvincing when people say they are too embarrassed to show the receipts for their lunches because those are simply too lavish. Yet they are not the slightest embarrassed to go round to tell all and sundry they are having lavish lunches.
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Old Mar 31, 2013, 9:03am   #35
Joined Mar 2013
Re: What is your most profitable pattern?

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.
This is similar to an approach recommended by a Russian mathematician whose name completely escapes me. He used two horizontal lines chosen I think at random. Iíll try and dig the piece on it out as I remember being interested. Obviously not enough to remember the details or his name.
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Old Mar 31, 2013, 9:18am   #36
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Re: What is your most profitable pattern?

Quote:
Originally Posted by counter_violent View Post
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.
That shouldn't be a problem if you diversify and trade different markets , and you may like to put a limit for your losses/day/market , eg. if you lose 50 pips in Cable/day you stop .
You stole that idea from me
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Old Mar 31, 2013, 10:07am   #37
Joined Mar 2013
Re: What is your most profitable pattern?

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Originally Posted by Purple Brain View Post
This is similar to an approach recommended by a Russian mathematician whose name completely escapes me. He used two horizontal lines chosen I think at random. Iíll try and dig the piece on it out as I remember being interested. Obviously not enough to remember the details or his name.
Igor Toshchakov - The Igrok Method. I now remember why I forgot.
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Old Mar 31, 2013, 10:14am   #38
Joined Mar 2013
Re: What is your most profitable pattern?

The concept of the coin toss entry or randomly throwing yourself in at the deep end and managing your way out of a trade being more important than finding a good entry point seems a popular one with the more experienced traders. I’ll be delighted to eventually arrive at that same conclusion, but right now, I can’t see the point of letting go of the other edge we potentially possess, that of finding an entry point that more likely than not supports our intended trade for both value of entry level and potential momentum to carry us to target, or at least profit.
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Old Mar 31, 2013, 10:38am   #39
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Re: What is your most profitable pattern?

Quote:
Originally Posted by Purple Brain View Post
The concept of the coin toss entry or randomly throwing yourself in at the deep end and managing your way out of a trade being more important than finding a good entry point seems a popular one with the more experienced traders. Iíll be delighted to eventually arrive at that same conclusion, but right now, I canít see the point of letting go of the other edge we potentially possess, that of finding an entry point that more likely than not supports our intended trade for both value of entry level and potential momentum to carry us to target, or at least profit.
It is all in your imagination , all these patterns can be found in random prices charts as well , that must tell you something , the random line is different than a coin toss , it is based on the idea that a certain level wont be a turning point , so basically you are trading with momentum .
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Old Mar 31, 2013, 10:45am   #40
Joined Sep 2010
Re: What is your most profitable pattern?

Quote:
Originally Posted by Purple Brain View Post
The concept of the coin toss entry or randomly throwing yourself in at the deep end and managing your way out of a trade being more important than finding a good entry point seems a popular one with the more experienced traders. Iíll be delighted to eventually arrive at that same conclusion, but right now, I canít see the point of letting go of the other edge we potentially possess, that of finding an entry point that more likely than not supports our intended trade for both value of entry level and potential momentum to carry us to target, or at least profit.
For discretionary trading, your conclusion is a sound one.
The benefit of a 'coin toss' really lies in its value as a learning tool,
or as the basis for automation.

Quote:
Originally Posted by Purple Brain View Post
finding an entry point that more likely than not supports our intended trade for both value of entry level and potential momentum to carry us to target, or at least profit.
The reason for that is highlighted by what you said above.
That is far easier to evaluate on a discretionary basis than it is to
program.
Simply because it relies on subjective elements that are largely
absent in an automated environment.
All you have is hard data leading to a simple yes / no conclusion with automation.
Once you are in, you have a much more basic tool to gauge price action - unrealised PnL.

Also random does not have to mean every element of the entry is random.
Personally I don't see much point in entering randomly just before rollover
for instance.
So entry time is not an element I allow to be random, amongst other things.
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