Article Capturing Good Profits in a Short Time High: ?Fast?-Falling Triangles

[T2W Bot]

Systematic or discretionary? It?s an important question on the way to trading success. Most traders eventually end up belonging to either one or the other philosophical camp. In this article, Harald Weygand introduces an approach that most likely will interest the discretionary traders among our readers.
Traders and chartists can be categorised in various ways. Among the possibilities are system traders and intuitive chart readers. System traders develop a comprehensive set of rules, weighing statistics, utilising vast arrays of indicators and weaving intermarket correlations.  Finally they combine several systems after extensive back testing. The computer, not the person, screens the market applying the system. System traders with statistics on their side can set rules for drawdowns and quite effectively remove the problem of emotions from their trading. In other words, everything is contained within the system and decisions boil down to a simple yes or no.
The classic chart...

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[Rhody Trader]

This article was orginally published in Traders'.

 

[heasymo]

I used this pattern several times.It's highly effective indeed.
I like this kind of articles that explain a trading "technique'' or "system" clear and in a down-to-earth written style..

Heasymo

 

[Anonymous]

Clear and down-to-earth written style, I agree. The technique though is more suitable for analyzing a trade in hindsight.

When does a trader know whether the price at a particular point in time is a reversal point except after the price has reversed.

 

[TraderPattern]

Nice article. Well done!

 

[trendie]

how is the pattern described any different from the Ross 1-2-3 ?

its described as a special situation in fast markets. but its just a 1-2-3 as far as I can see.
blow-offs may be a high-probability variant, but its still a 1-2-3.

nothing new under the sun.

 

[Anonymous]

The technique might as well be described simply as: aim for the point where there is a high probability of a plunge and take a small risk with a cut loss somewhere above entry point.

One doesn't really need to be a sniper to know when to shoot, and you can't really have a one-shot-one-kill situation when you have a cut loss somewhere.

 

[Pippppin]

This article has particular resonance for me since my very first trade was a triangle which turned out to be very fast falling on 17th July 1996.

I sold one contract of Sep. Natural Gas on NYMEX. The price fell very sharply. I exited three weeks later for a profit of around £4500.

I have spent the subsequent nine years researching the mathematics of falling, and rising, triangles. They are just about the most powerful,and potentially explosive, recurring chart patterns....

 

[Anonymous]

Observe the similarity between the point before the first vertical grid to the left and the point at the first at the same vertical grid.

When does a trader know it the recurring chart pattern, except after the price has turned.

If a trader was to treat such as a reliable signal and took the first point before the first vertical grid to the left to short, and there are many such similarities, the chart pattern would not be a reliable forecast of a turning point.