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PATTERNS -- So These REALLY Work???
- Thread starter al c.
- Start date
Quote from axeman:
Ever notice now the bullish BAT pattern is a lower high?
Huh?
Ever notice how the bullish Gartley pattern is a lower high?
Huh?
Ever notice how the bullish Crab pattern is a lower high?
Huh?
Ever notice how the bullish AB=CD pattern is a lower high?
Huh?
Ever notice how the bullish Butterfly pattern is a lower high?
Huh?
Ever notice how all the patterns, except the three drives pattern, are lower highes or higher lows? But are labeled backwards from typical theory???
Strange...
peace
axeman
Thank you axeman. You are much more eloquent than me.
And, for all of you frantically searching the net for the "squid" pattern, relax - it was my attempt at sarcasm!
:eek:
I prefer to use simple Fibonacci retracements and extensions, in conjunction with a few other indicators.
Right. My hunch would be that confirmation of, say, a Fib. extension by an indicator of some kind might increase the likelihood of pulling off a successful trade -- or at least a scratch. I bet an extension would work nicely in combination with an oscillator divergence, or maybe even just a straight OB/OS condition. Is that the kind of stuff you mean?
Right. My hunch would be that confirmation of, say, a Fib. extension by an indicator of some kind might increase the likelihood of pulling off a successful trade -- or at least a scratch. I bet an extension would work nicely in combination with an oscillator divergence, or maybe even just a straight OB/OS condition. Is that the kind of stuff you mean?
Interesting comments on the thread. Thanks.
With regard to books. I have read many books as I am sure you all have on Trading. So many write books that are at best a repeat of previously covered material and seldom do I learn very much as a result of there purchase.
Please do not confuse what you read in a Book on " Pattern Trading" and how PROFITABLE pattern trading is accomplished. What I am trying to point out is, for example, if one reads Larry pesavento's excellent works and attempts to use the patterns or methods he explains without first fully understanding the method -- well you are probably not going to succeed.
I have all of Larry's books. While there is some repetition in his books this is necessary since how would any author know if concepts presented in one book would be available to the reader of one book. But there is new information in each of his books.
If you want ONE book of Larry's then I suggest you get the "Fibonacci Ratios with Pattern Recognition". This may be the only one you will need.
Regarding the mention of other books I never believe that I should hold myself out as a critic of anothers work. However, if you found what "axeman" addresses in his post above -- then it did not come from Larry's books. I believe the reference is to Carney's book as Larry nor any others uses Crabs or Bats as a descriptive term. From what was posted here I would agree with axeman that it is NOT valid for trading.
In my opinion the best NEW work that is available on Pattern Trading is "The Step-by-Step Guide to Pattern Trading" by Al Coppola. It is available by contacting the author and the best place to find him is in a chatroom he runs for Free:
http://relay1.ezpeer.net/im-live/rt.htm?-rm=realtime
The above link gets you to his chatroom -- you can enter using the password or room key which is "passs"
There you may see if you think he is effective and knowledgeable with his analysis of Pattern Trading. He posts 'live" realtime charts there and wonderful explanations of his trades. In my opinion the book is well written, lucid, and extremely useful. I purchased on a generous Money back guarantee and would not have kept it -- if it wasn't of great value. If after trading hours you wish to see some of the book Al, I am sure, will post some of it in the room for your review. (He does this with actual pages from the book -- utilizing the slick software that the room employs.
Thanks for allowing me to participate in this great forum !
With regard to books. I have read many books as I am sure you all have on Trading. So many write books that are at best a repeat of previously covered material and seldom do I learn very much as a result of there purchase.
Please do not confuse what you read in a Book on " Pattern Trading" and how PROFITABLE pattern trading is accomplished. What I am trying to point out is, for example, if one reads Larry pesavento's excellent works and attempts to use the patterns or methods he explains without first fully understanding the method -- well you are probably not going to succeed.
I have all of Larry's books. While there is some repetition in his books this is necessary since how would any author know if concepts presented in one book would be available to the reader of one book. But there is new information in each of his books.
If you want ONE book of Larry's then I suggest you get the "Fibonacci Ratios with Pattern Recognition". This may be the only one you will need.
Regarding the mention of other books I never believe that I should hold myself out as a critic of anothers work. However, if you found what "axeman" addresses in his post above -- then it did not come from Larry's books. I believe the reference is to Carney's book as Larry nor any others uses Crabs or Bats as a descriptive term. From what was posted here I would agree with axeman that it is NOT valid for trading.
In my opinion the best NEW work that is available on Pattern Trading is "The Step-by-Step Guide to Pattern Trading" by Al Coppola. It is available by contacting the author and the best place to find him is in a chatroom he runs for Free:
http://relay1.ezpeer.net/im-live/rt.htm?-rm=realtime
The above link gets you to his chatroom -- you can enter using the password or room key which is "passs"
There you may see if you think he is effective and knowledgeable with his analysis of Pattern Trading. He posts 'live" realtime charts there and wonderful explanations of his trades. In my opinion the book is well written, lucid, and extremely useful. I purchased on a generous Money back guarantee and would not have kept it -- if it wasn't of great value. If after trading hours you wish to see some of the book Al, I am sure, will post some of it in the room for your review. (He does this with actual pages from the book -- utilizing the slick software that the room employs.
Thanks for allowing me to participate in this great forum !
Quote from kgharris:
I don't have an issue with Carney, but in talking with traders who keep track of his record it is dismal. The problem I have with the patterns, is that there is one to fit almost every scenario - and you might get stopped out of two or three trades before you know which pattern is the right pattern. Gartley, Butterfly, Bat, Crab, Squid - just like anything else you can look back at charts and find examples of each. But try to trade them real-time and you get hurt badly.
I prefer to use simple Fibonacci retracements and extensions, in conjunction with a few other indicators.
One trader's use of Patterns is certainly not representative of the overall effectiveness or profitability of pattern trading. Pattern trading has worked over and over again in all markets and timeframes. It is the basis for many profitable trading systems and is, of course, a major part of technical analysis.
In other words don't judge a book by its cover -- nor condemn patterns just because someone has as you say, "... a dismal record" using what may be a poor approach to using patterns. There are many Highly Profitable pattern traders -- some of them even trade "live" with charts that you may see as the trades are made realtime. Check this out : http://relay1.ezpeer.net/im-live/rt.htm?-rm=realtime (use the room key "passs" to enter Free) Then comment please.
Thanks
Everyone has analysis and monitoring techniques they engage in.
Patterns do play an important role for me as I try to figure out more and more about making my money velocity higher.
I just use bar charts and I am not acquainted thoroughly with the candlestick formations or their names. They do not appeal to me because they have such a great visual emphasis singlely and in groups. The HLOC stuff is such an unfortunate set of values in the first place.
I have spent eons looking at the P,V relationship and the corresponding formations that pair up in these two direct market variables. I have choosen to not deal with price patterns alone.
There is nothing wrong with people truncating their analysis and monitoring to consider the just the displays that the do. As we know it is torture for some to go through anything that is any more complicated than they think is necessary.
I like to examine how people do their thing. What I learned most from formations was the division of responsibility between the market and me. Formations give me a hand at all times and I get my timing values and protection values from these.
I work backwards re formations compared to others here. I see formations as a synthesis of basic shapes. The two parts of the P,V relation give me the basic shape. From that, I see the pairs of shapes, one for price and it's volume companion, being strung into sequences that flow in natural combinations. Until an anomoly occurs, like in matters of physics, they seem to continue for long times.
The underlying noise of the market "floats" formations until the volume formation part of the pair extinguishes everything.
I bury short term formations in two ways to achieve a "standard" in my maintenance of money velocity. Decision making is continual for me because I to not set targets and the market enter me because it is the market's responsibility. My decisions are to be on the right (correct) side of the market (I believe this because I observe that somone is always making money and I figure, for me, it is not going to be the other guy). That is all I decide.
Formations all have left and right sides. and you make money using these sides. Occasionally you will see people here using the other two sides possible. Since trading is about the left and right side you cannot assign a target if you are a trader. It looks like you are not a trader if you have targets.
Traders have an alternative and that is the flow of profits they take as the right side of the formation moves along. I recognize that there is a plethora of terminology about the price dimension of sidplays; it is hard for most to leave that place. Almost all fear myths are based upon having a vertical orientation to the market instead of having the horizontal one. Almost all plans have horizons (they are things that you look to the right to see usually) that get subverted when people look away from them and reorient vertically.
The most important thing is the right side of a formation and how rapidly it is changing from what it is to it's next form. I log the values on the right side methodically as a way of doing C&R's periodically. The periodicity is determined by the activity of the right side as well. Pace and change, determine my money velocity.
I determine the pace by changing my display until the movement resemble a "tape being formed of bars. It shows a relatively constant width (you will think heighth almost immidiately by the way). To see the fineness i could have for monitoring protection I go to faster fractals to log the formation extremes as milestones in time going to the right. I do housekeeping on the log to maintain an offset on my C&R's at regular timed interavls. Each interval is a move to the right. the pace determined my offset of protection.
If the market makes a move as shown by a synthesis of formation pairs, then I, accordingly get on the "new" right side of the market. This, naturally deposits money in my account and I then continue to allow more to build over for extraction.
You need to undertand why I am saying thing that appear as torture. If that's the way it is.
i do not add a lot to the picutres I have unless I go to the kinds of pictures other people have. Then I use their views to try to depict what I see the market doing.
Patterns do play an important role for me as I try to figure out more and more about making my money velocity higher.
I just use bar charts and I am not acquainted thoroughly with the candlestick formations or their names. They do not appeal to me because they have such a great visual emphasis singlely and in groups. The HLOC stuff is such an unfortunate set of values in the first place.
I have spent eons looking at the P,V relationship and the corresponding formations that pair up in these two direct market variables. I have choosen to not deal with price patterns alone.
There is nothing wrong with people truncating their analysis and monitoring to consider the just the displays that the do. As we know it is torture for some to go through anything that is any more complicated than they think is necessary.
I like to examine how people do their thing. What I learned most from formations was the division of responsibility between the market and me. Formations give me a hand at all times and I get my timing values and protection values from these.
I work backwards re formations compared to others here. I see formations as a synthesis of basic shapes. The two parts of the P,V relation give me the basic shape. From that, I see the pairs of shapes, one for price and it's volume companion, being strung into sequences that flow in natural combinations. Until an anomoly occurs, like in matters of physics, they seem to continue for long times.
The underlying noise of the market "floats" formations until the volume formation part of the pair extinguishes everything.
I bury short term formations in two ways to achieve a "standard" in my maintenance of money velocity. Decision making is continual for me because I to not set targets and the market enter me because it is the market's responsibility. My decisions are to be on the right (correct) side of the market (I believe this because I observe that somone is always making money and I figure, for me, it is not going to be the other guy). That is all I decide.
Formations all have left and right sides. and you make money using these sides. Occasionally you will see people here using the other two sides possible. Since trading is about the left and right side you cannot assign a target if you are a trader. It looks like you are not a trader if you have targets.
Traders have an alternative and that is the flow of profits they take as the right side of the formation moves along. I recognize that there is a plethora of terminology about the price dimension of sidplays; it is hard for most to leave that place. Almost all fear myths are based upon having a vertical orientation to the market instead of having the horizontal one. Almost all plans have horizons (they are things that you look to the right to see usually) that get subverted when people look away from them and reorient vertically.
The most important thing is the right side of a formation and how rapidly it is changing from what it is to it's next form. I log the values on the right side methodically as a way of doing C&R's periodically. The periodicity is determined by the activity of the right side as well. Pace and change, determine my money velocity.
I determine the pace by changing my display until the movement resemble a "tape being formed of bars. It shows a relatively constant width (you will think heighth almost immidiately by the way). To see the fineness i could have for monitoring protection I go to faster fractals to log the formation extremes as milestones in time going to the right. I do housekeeping on the log to maintain an offset on my C&R's at regular timed interavls. Each interval is a move to the right. the pace determined my offset of protection.
If the market makes a move as shown by a synthesis of formation pairs, then I, accordingly get on the "new" right side of the market. This, naturally deposits money in my account and I then continue to allow more to build over for extraction.
You need to undertand why I am saying thing that appear as torture. If that's the way it is.
i do not add a lot to the picutres I have unless I go to the kinds of pictures other people have. Then I use their views to try to depict what I see the market doing.
Quote from Salzburg:
I prefer to use simple Fibonacci retracements and extensions, in conjunction with a few other indicators.
Right. My hunch would be that confirmation of, say, a Fib. extension by an indicator of some kind might increase the likelihood of pulling off a successful trade -- or at least a scratch. I bet an extension would work nicely in combination with an oscillator divergence, or maybe even just a straight OB/OS condition. Is that the kind of stuff you mean?
Hey Salzburg. Actually, I am to the point that I use Fibonacci Retracements and Extensions for my EXITS. For entry, I use trendline breaks and SMA's. I learned the intricacies of this technique from another trader on these boards - Kernan, whom I believe has it in his signature line.
Play around with your entries and look at simple Fibs for exits - I think you will find it works great.
Quote from PBBC:
In other words don't judge a book by its cover -- nor condemn patterns just because someone has as you say, "... a dismal record" using what may be a poor approach to using patterns.
I in no way was doing that PBBC. If you read my post, you can see I was specifically talking about Carney and the Fib patterns incorporated in his material. Read axeman's post following mine for more clarification.
I trade certain patterns, and would never "condemn" them in general.
Have a good, long weekend.
Hey Salzburg. Actually, I am to the point that I use Fibonacci Retracements and Extensions for my EXITS. For entry, I use trendline breaks and MA's. I learned the intricacies of this technique from another trader on these boards - Kernan, whom I believe has it in his signature line.
Kernan . . . Kernan . . . is he the chap who's responsible for www.tradethemove.com? Is that the method you're referring too? I've heard good things about the book that's promoted through that site.
Kernan . . . Kernan . . . is he the chap who's responsible for www.tradethemove.com? Is that the method you're referring too? I've heard good things about the book that's promoted through that site.
To hear a radio interview with Larry Pesavento, and others check out:
http://www.nationalfutures.com/radio_show.htm
Here's the list of archived interviews:
1.) Larry Pesavento - Aired 3/5/03
2.) Toni Turner - Aired 3/19/03
3.) John J. Murphy - Aired 4/2/03
4.) Martin Pring - Aired 4/9/03
5.) Jim Gosselin - Aired 4/16/03 (CBOT Market Maker)
6.) Mark Douglas, Larry Pesavento, Robert Miner, Allan Farley
Aired - 4/23/03
7.) John Bollinger - Aired 4/30/03 (Creator of Bollinger Bands)
8.) Lan Turner - Aired 5/7/03 (Creator Gecko Software)
9.) Chris Krohn- Aired 5/14/03 (Single Stock Futures expert)
10.) Linda Bradford Raschke -Aired 5/21/03
11.) Larry McMillan- Aired 5/28/03 option expert
12.) Gary Kamen - Aired 6/4/03 Director for Futures Magazine
13.) John J. Murphy - Aired 6/11/03
14.) Victor Niederhoffer - Aired 6/18/03
15.) Steve Nison - Aired 6/25/03
16.) Robert R. Prechter - Aired 7/2/03
http://www.nationalfutures.com/radio_show.htm
Here's the list of archived interviews:
1.) Larry Pesavento - Aired 3/5/03
2.) Toni Turner - Aired 3/19/03
3.) John J. Murphy - Aired 4/2/03
4.) Martin Pring - Aired 4/9/03
5.) Jim Gosselin - Aired 4/16/03 (CBOT Market Maker)
6.) Mark Douglas, Larry Pesavento, Robert Miner, Allan Farley
Aired - 4/23/03
7.) John Bollinger - Aired 4/30/03 (Creator of Bollinger Bands)
8.) Lan Turner - Aired 5/7/03 (Creator Gecko Software)
9.) Chris Krohn- Aired 5/14/03 (Single Stock Futures expert)
10.) Linda Bradford Raschke -Aired 5/21/03
11.) Larry McMillan- Aired 5/28/03 option expert
12.) Gary Kamen - Aired 6/4/03 Director for Futures Magazine
13.) John J. Murphy - Aired 6/11/03
14.) Victor Niederhoffer - Aired 6/18/03
15.) Steve Nison - Aired 6/25/03
16.) Robert R. Prechter - Aired 7/2/03