You have got to be kidding me.
No pressure.
All the time in the world to analyze.
The correct bias.
etc etc etc
Are all price patterns the same? (examples)
- Thread starter 1a2b3cppp
- Start date
You have got to be kidding me.
No pressure.
All the time in the world to analyze.
The correct bias.
etc etc etc
Quote from 1a2b3cppp:
Alright, price can really only do 6 things:
- HH
- HL
- LL
- LH
- DT
- DB
Now a bottom is always going to be a low, and by definition it's not going to be a higher low, so that means a bottom is always going to be a LL or a DB.
So you see people say things like a W is a bottom formation.
Well, a W is either going to be a DB or sometimes I've seen people label a W when the second bottom is a bit lower than the first (making it a LL). Of course a bottom might be a W!
IHS is another bottom pattern. IHS is LL, LL, HL (so price is already on its way back up).
You've got a 2t which is really just a high and a higher high. Of course it's a top; it's a higher high. Hopefully if you go short it doesn't form another higher high.
Agreed. I use the following: Higher High, Equal High, Lower High, Higher Low, Equal Low, or Lower Low. But these are just building blocks...
Yup...
Think in rules. I follow hard rules. The trick is learning to codify the forest from the trees. People get stuck because they see trends in simple bar-by-bar terms.
There is only one pattern in the market and that is obvious even in hindsight:
http://en.wikipedia.org/wiki/Dow_theory#Six_basic_tenets_of_Dow_theory
http://en.wikipedia.org/wiki/Dow_theory#Six_basic_tenets_of_Dow_theory
I notice the OP has started quite a few threads where he seems to want to get trading down to an exact science. That is impossible. Trading is an art, and like another poster said, it's all about probabilities. No patterns will tell you with 100% certainty what will happen next.
Glad we all agree on the only 6 things the market can do.
Now let's talk about how to identify them in real time. [/QUOTE]
You're actually very close. How do you define trend?
It seems to me that the next step is to find a pattern of HHs and HLs or LLs and LHs and then writing up some rules around that. If you have 6 different market events (HH, HL, LL, LH, DB, DT), then figure out what combination of those events more often than not leads to a significant price move.
From my limited experience, that's your signal, and then the actual 'edge' comes from more rules for risk/money management and so on.