What is your most profitable pattern?

[ZEN archer]

Any chart pattern with extreme success rate will do

Also chart patterns with extreme failure rate could be very profitable if your trade against them (h&s etc.)

 

[Purple Brain]

Bouncing off the moving average from a pullback and returning to the underlying trend. The most profitable - and the least successful in terms of winners v losers.

The second most profitable is reversals through the moving average into a new trend direction. I typically, but not always, wait for the new trend to confirm with a bounce of the moving average. See above. But where there is significant momentum, I'll trade the trend change on the break.

 

[Purple Brain]

ZEN Archer, just realised what I posted above isn't a chart pattern. Apologies. Please delete if inappropriate for this forum.

 

[Triggerfish]

H&S = ?
Triangle = ? What is the difference between a flag and triangle?

 

[ZEN archer]

ZEN Archer, just realised what I posted above isn't a chart pattern. Apologies. Please delete if inappropriate for this forum.

I can't delete it (only moderators can do that) and I wouldn't anyway - it's always good to get some trading ideas from you PB

 

[ZEN archer]

H&S = ?
Triangle = ? What is the difference between a flag and triangle?

H&S = head and shoulders

Triangle - see below (it looks like a triangle)

Flag looks like a channel (parallel lines) - I drew one

 

[Triggerfish]

Regarding your H&S, you need to extend past the orange line with confirmation.....agree?
Triangle is just another flag no?.....anyway, I don't trade patterns.....I trade price.

Patterns are the result of price.....so why would one wants to trade patterns?
So the real question here is what is the creation of price?.....why trade patterns where you can trade price?

There are NO patterns when you can SEE price!

 

[ZEN archer]

Patterns are the result of price.....so why would one wants to trade patterns?
So the real question here is what is the creation of price?.....why trade patterns where you can trade price?

To make profit? (if there are such patterns - with high success/failure rate)

 

[Triggerfish]

So are you saying patterns or TA is the KEY to successful trading?.....there should be plenty of those traders around as there are many books too.....all available to buy.....so we can ALL become successful?

But.....is this a reality?

 

[ZEN archer]

So are you saying patterns or TA is the KEY to successful trading?.....there should be plenty of those traders around as there are many books too.....all available to buy.....so we can ALL become successful?

But.....is this a reality?

I don't know TF

I can almost say I don't trade them - most of the time I ignore them, unless they're confirming certain levels etc.

I've listed here only few well known patterns. There could be some useful patterns we are not aware of. I've read a book (written by traders) and was exploring their patterns. It seems like they used to work nicely before, but when applying them to the markets nowadays they tend to fail miserably

 

[BeginnerJoe]

if there are such patterns - with high success/failure rate

Yes, there are such patterns. Out side of strong fundamental based moves, the markets makes profit by seeking out liquidity. When there is more liquidity above the current price level, the price goes up. When more below, the price goes down. Reversal happens when liquidity dries up in a particular direction. These occurances are extremely high probability. I can't give you the specifics. See this more as an inspiration.

 

[ZEN archer]

Yes, there are such patterns. Out side of strong fundamental based moves, the markets makes profit by seeking out liquidity. When there is more liquidity above the current price level, the price goes up. When more below, the price goes down. Reversal happens when liquidity dries up in a particular direction. These occurances are extremely high probability. I can't give you the specifics. See this more as an inspiration.

Thanks for the inspiration BJ
Very good liquidity seeking observations. Also the part about drying liquidity is simply excellent.
I'll immerse myself in liquidity studies straight away

PS Don't worry about the specifics - it's a minor detail:whistling

 

[BeginnerJoe]

Thanks for the inspiration BJ

Once you know what to look for, you are half way there.

I'll immerse myself in liquidity studies straight away

You are already immersed in it, just that you don't know it - a bit like the story in which one of the blind men who felt the leg of an elephant and said that was a tree.

 

[Triggerfish]

You are already immersed in it, just that you don't know it - a bit like the story in which one of the blind men who felt the leg of an elephant and said that was a tree.

You mean this one?

"'Tell me, blind people, what is an elephant like?'

"Those blind people who had been shown the head of the elephant replied, 'An elephant, your majesty, is just like a water jar.' Those blind people who had been shown the ear of the elephant replied. "An elephant, your majesty, is just like a winnowing basket.' Those blind people who had been shown the tusk of the elephant replied, 'An elephant, your majesty, is just like a plowshare.' Those blind people who had been shown the trunk replied, 'An elephant, your majesty, is just like a plow pole.' Those blind people who had been shown the body replied, 'An elephant, your majesty, is just like a storeroom.' Those blind people who had been shown the foot replied, 'An elephant, your majesty, is just like a post.' Those blind people who had been shown the hindquarters replied, 'An elephant, your majesty, is just like a mortar.' Those blind people who had been shown the tail replied, 'An elephant, your majesty, is just like a pestle.' Those blind people who had been shown the tuft at the end of the tail replied, 'An elephant, your majesty, is just like a broom.'

"Saying 'An elephant is like this, an elephant is not like that! An elephant is not like this, an elephant is like that!' they fought each other with their fists. And the king was delighted (with the spectacle).

 

[barjon]

............ It seems like they used to work nicely before, but when applying them to the markets nowadays they tend to fail miserably............

Nothing "works" in the sense of certainty in the outcome, but many things "work" in the sense of giving you some reason to take a trade. What does work is the ability to take sufficient advantage when price moves favourably and to limit the damage when it doesn't.

Most of these patterns fire a starting gun, but you don't win the race at the start - you win it at the finishing line.

 

[ZEN archer]

Nothing "works" in the sense of certainty in the outcome, but many things "work" in the sense of giving you some reason to take a trade. What does work is the ability to take sufficient advantage when price moves favourably and to limit the damage when it doesn't.

Most of these patterns fire a starting gun, but you don't win the race at the start - you win it at the finishing line.

Agree with most of it Jon
High success/failure rate patterns would make more accurate starting gun. I prefer being spoilt for choice as how much profit should I take from the very start rather than starting with a loss. It could be something to do with my trading style - impatient, quick profit taking without too much 'profit running' involved.

BTW I can see that 5 members use some other patterns (from the poll), but they wouldn't reveal the specifics:whistling

 

[barjon]

..........It could be something to do with my trading style - impatient, quick profit taking without too much 'profit running' involved........

Aye, well if you're running in the 100 metres a good start is pretty important, less so over the longer distances.

Nonetheless, I still think momentum at the time of entry - rather than level - is the more important factor if you want to start off with a bang.

 

[BeginnerJoe]

I prefer being spoilt for choice as how much profit should I take

My sentiments exactly. This is why when I publicly throw 100 or 200 pips away I felt perfectly fine because it was my choice. Further more I knew there were plenty more where those came from. Throwing some away was no biggie.

I think realising being satisfied with 20 pips gains is a path to loose is the first step to the next level.

 

[ZEN archer]

My sentiments exactly. This is why when I publicly throw 100 or 200 pips away I felt perfectly fine because it was my choice. Further more I knew there were plenty more where those came from. Throwing some away was no biggie.

I think realising being satisfied with 20 pips gains is a path to loose is the first step to the next level.

I'm not a great fan of throwing away profit BJ (not too much of it anyway), but I like being spoilt for choice as how much profit I should take. That's why I was trying to find such a pattern (with no success so far)

BTW That post of Jon's is excellent (post #17)

 

[BeginnerJoe]

I'm not a great fan of throwing away profit

Your constant fear of throwing profits away could be precisely the reason why more profit don't come to you. You just have to have the balls to allow more profits to come to you. In any case, I don't believe running profits has anything to do with patterns. It's a completely different problem and the solution can be extremely simple. Since it can be that simple, you can find it all by yourself.

Here's my final-final holy grail for trading you can have for free. Both rules are of equal priority:

A profit doesn't come easily, you must guard it.
A winner doesn't come easily, you must run it.