hello my fellow friends, i have one question and i think this is a good question to be answered. How do we know that the flag pattern is unvalid ? weknow that flag pattern is a good setup for any entry but it make us scareed when it doesn’t goes like what we wanted to. based on my trading experience, my flag pattern can change to double top or double bottom pattern. so, i just want to know if there is trader that have same experience as me and i appreciate your sharing by explaining on how we do a conclusion on this trade
we don’t
we can never know whether any individual bar pattern is going to be valid or invalid, only whether it’s a pattern that’s collectively worthwhile
as bar patterns go (and for me they go quite a long way because i trust them a lot more than indicators) the “flag” isn’t one in which i have a lot of confidence
i think the mistake to avoid is trying to “confirm” them with indicators, because if the pattern turns out to be an invalid instance, then it’s very likely the indicators will be misleading too, so they won’t usually help at all
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I know the confusion and I feel your pain. Because price can do anything, you might be excused for thinking that any chart pattern can change into any other chart pattern.
But keep things simple. Price can only go up or go down or go sideways. When it is going up the most common thing for price to do next is to continue rising. But you must plan for the what if - what if it does not go up?
For example if you see a pattern which suggests price will rise, you can set an entry order above a level which would prove you are right. If price does not rise, the order will not be triggered and you will have lost nothing.
And no matter why you get in long, you can set a stop-loss at a level where price demonstrates that it has finished rising and is now more likely to fall.
Plan what might happen. Be ready. Stop worrying.
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