All you need is one pattern

A great insight. I couldn’t have put it better myself.

Please post up the source as there might be some other really useful information I could find there.

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Great points Dale. Too much focus on a fine-detail pattern can lead to dangerous assumptions.

In fact, the chart data problem is worse for some traders than even your summary sets out. I use two chart sources - my spreadbetting broker and a proprietary TA programme. Wider perspective, both say the same thing - if price is in a downtrend on the daily charts, they both agree but that’s pretty obvious. But often one will show a doji or a shooting star and the other just shows a long-bodied candle. If I traded off stuff like pin-bars that would really screw my plans up.

Even worse than this, because the TA programme only goes down to the daily time-frame, it is not continuously updating, charts are updated at set download times. So the programme refreshes at about 1815hrs UK time to reflect the scenario at the London close - 1630. It then doesn’t refresh until about 2215 to reflect the US close - 2130. It next refreshes about 0715 the next morning to reflect the Asian close.

Occasionally, this means what I thought was one pattern finalises as another. Just this morning I cancelled an entry order for next week because of this.

How many online charts work the same way but their providers don’t fully disclose this?

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Yeah I agree. I focus only on Consolidations on the Daily & 4 Hour Charts. Specifically 3 types of Consolidation setups…

  1. Early Patterns That Start Consolidations

There are certain Bearish & Bullish Waves that tell us when the Pair is forming Consolidation. Once we spot them early…we can trade them instead of having to wait until the Consolidation is completed and then trade. Because sometimes by the time they are formed, we might not get setups with the Pip Targets/ Stop Loss combination we prefer.

For example…based on the waves formed on GBP CAD Daily Chart a few weeks ago…it appesred to be forming a large Consolidation. I then trqded the Bearish trend on the 4H as the pair headed to Support…

Entry took place on the 4 Hour Chart when it broke a Small Pennant Setup…

After a few days…103 Pips were captured

Similar ttade on the USDJPY the week before
.

…exiting just before it rallied

  1. Trading Within Consolidations

Of course once the Consol. is formed…we can trade between Resistance and Support until the Breakout takes place…

  1. False Consolidation Breakout Reversals

And if we see a Reversal taking us back inside following a failed breakout attempt…

can also trade them like these 2 trades this week on the USD CAD…

…and on the EUR CAD a few weeks ago…

So I trade anything involving moves within Consolidation Boundaries which I have found to be very rewarding …as long as the Signals are clear and offer Strong Stip Loss placement on these time frames.

I no longer trade Breakouts because these have become more risky in the last few years.

Duane
DRFXTRADING

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It has been interesting to read all of the responses. Some have very good points. It is probably my own fault for using the word pattern as I never would have thought of dropping to lower and lower time frames to see a pattern more often as even an option. Lower time frames are just filled with too much noise for me to consider that.

It was good to read about the potential for patterns to be different depending on the location and hours of brokers. Although most traders I personally have spoken with tend to agree on using 5 o’clock new york close charts for price action trading but it remains a valid point nonetheless.

I think the big players tend to look at new york close charts on the whole and those are the dynamic traders who actually move the market. We as retail traders even 100% united make very little impact.

For me my “Pattern” if you will has been identifying Important levels that price has reacted to in the past and then looking to see how it reacts once it returns.

There can be many successful strategies if you have the psychology to back it up and manage your risk. I mean we can be “right” less than 50% of the time and still make some money in trading. The only thing that matters is how much we lose when we are wrong and how much we make when we are right.

if you consistently lost $1,000 a month for 11 months and then made $30,000 the 12th month you would be profitable, but how many would have the pyschology to take all those losses? I feel a large majority would just quit. (Yes that is an exaggerated example I know.)

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Nice post.

And very true about the less than 50% “right”. I’ve been banging on around these parts about the fact that you can be 80% “right” and still be losing money. All fallen on deaf ears but it’s borne out by mathematics and happens because of incorrect position sizing and adjustment.

But again: very good post.

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Thank you.

I appreciated your input on the different time zones with brokers. It was something I never really thought of as far as stocks and other markets all having an agreed upon open and close.

I am still very new to trading but so far have managed to be profitable. I have had some draw downs that I overcame by sticking to my strategy and not changing up! I’m somewhere around 40 to 45% win rate but my account is small as I don’t want to risk big money yet! :slight_smile:

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Well use candlestick patterns like pinbars, engulfing bars, morning stars and inside bars appearing at support and resistance levels. Take note of high impact news releases happening around the same time you intend to trade. It can really make a mess of and candlestick or chart pattern.

e.g. The daily bearish pinbar of EURUSD on 5th JUNE 2019 was annihilated following a news release the next day. Check it out.

There is only one indicator t I use that trumps all the others in my opinion. That indicator is price. i am a scalper who trades in small Windows with great success. Sure I pay attention to trends,support and resistance but most importantly is current price. I don’t care what happened yesterday,or last week. I only consider the 10 minute candlesticks looking for the right pattern to form. I’,m proud to say using my method has yielded me a 94% win ratio during May and June. However the price must meet my criteria before I enter. So Price works well for me as a scalper. I don’t buy into day trade or swing trades. I only pay attention to the next 10 minutes. May not work for everyone,but that’s my strategy. Thanks for reading ( if you did).

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@tgrant may i ask ur average loss and average win? i know a few that trade like u do, and i know that some have very few losses but those losses outweight all the winners. hope that s not the case here, and congrats. stay green

He has one post with two likes and has revealed nothing - don’t get yourself convinced until you know a lot more ! :wink:

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i ain t looking to trade like him or like no1 here for that matter , i was just curious about the way he s aproaching the issue, it can be done but it s a hussle from the stoploss point of view… u can win 9 out of 10 trades going for 3 pips each, but if when u lose, u lose much more then it s a problem, price almost always plays around a bit when u enter, u need a bit of cushin, and when trading like that i can only imagine he s targetting few pips, that s why i was curious

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I use one pattern on 28 daily charts, this brings me the money I want. I do my best to keep things very simple as I do not want to be studying charts for more than an hour per day…

Trading can be very simple, it took me a very long time to see that.

I use a CCI cross and three moving averages to prove the trend… simple simple simple

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My winners far outweigh losses. I typically average about $400.00 per week net.

i asked bout average win , average loss per trade @tgrant , but nevermind, keep up the good work. cheers

We get these types of “Hype” all the time here mate - He won’t give you any information at all IF he is typical of the type.

Don’t get suckered in to going to different sites or to communicating by pm. You’re new here, so just watch how he tries to create a “feeding frenzy” - which he hopes he can monetise.

Now as I said he now has 2 posts and has told us absolutely NOTHING. Just watch and learn so you can see them coming in the future. :wink:

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Hey traders, in my opinion ignore all chart patterns and candle stick patterns. Instead focus on resistance and support lines, I preach this a lot because of a pair has touched a resistance line, say, 4 times then physics would suggest that that resistance line is a strong one, would need X amount of force to break it. Now put this into trading terms the “force” need to break this resistance line in our example is market behaviour( traders emotions, or bad news,trump took a poop on queens desk, etc).

This is how I trade, I also use Darvas box system which works well for stocks as well, I also use trend lines and that’s it.

Granted I do not have as much time to trade as I used to, hence why I moved more to stocks now as they take less time and I used these tools I’ve said above in stocks, but with stocks I also use a few fundamental quantitative measures as well to show me what my odds are like.

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I also think that trading is simple. However, I was not thinking that in the beginning. If you have winning strategy helps a lot, but in order to get this strategy you need to spend a lot of time learning, experimenting, testing, and researching. This is not an easy part of trading

Ignore patterns - really? if you are doing TA, then you have to look for patterns to make money. There is no way getting around it unless of course you only use fundamental analysis.

@hsg1974 I guess a part of the discussion is about what’s works for you. And I do not use Fundamental analysis and I have found chart patterns do not work for me, hence why I have used what I know Physics .

No disrespect Hsg1974 but no you don’t need patterns to make money I think that is silly, because you need to figure out what works for you not just copy some one else, and there is much evidence that proofs the patterns have become useless nowadays because of market popularity.

But i really recommend you have little at adding basic physics to you’re trading, in the way of support and resistance lines and trend lines, like I said in my post before about need a strong force to break a resistance line. How I trade is a very basic example; is say a pair has touched a very strong resistance line I would consider using all the other tools like trend lines , SMA and experience which is a big part , etc to find okay where is the support line of this Box where the price is bouncing in and then start looking for an entry to the trade and risk management all that stuff. That is a really basic quick example.

@hsg1974 also Don’t criticise about if people use patterns or not because what I have told you can be added to you’re trading tool box and you may see a Box soon where price is bouncing between a support and resistance line.

One thing I do agree that you should use what works for you. But you are the one who is making a big statement that patterns don’t work. Maybe they don’t work for you. But they certainly work for me along with Demand/supply zones and trendlines.