SNDK, is that a cup?

[suriNotes]

Hi,

Thanks for your response...

Chart Patterns trading existed from a long time.. But like many other indicators, chart patterns is NOT a holy grail either. In my book, I wrote "There are no perfect chart patterns and chart patterns do fail..."

Given that, as a trader you must have an idea to make a trade. You observe the price-action and form an opinion of a buy/sell decision... Pattern analysis is one of the idea type.. There are many other types of analysis.. Of course, some one else thinks opposite of your ideas and creates a market to trade..

Your confidence in a pattern comes from your trading experience and back-testing of why price "stops" at a level and reverses or why certain conditions play well repeatedly... I am sure market-psychologists can explain better than I am...

No trader should accept or "trust" any indicator/pattern without understanding and experiencing the potential possibilities and probabilities of a "trade idea."

I have traded patterns successfully for over 12 years and am certainly biased about 'chart pattern trading'... but i have also seen other traders who use many other types of analysis and do equally well...


kind regards,
suri

Quote from rphuga89:

Wow


Thanks for the quick reply! I have read O'Neils' books and he does discuss a bit about what is happening in terms of sentiment
swings. Still, I have not read from anyone about the underlying workings that force the C/H breakouts to occur. Even when talking about Parabolic breakouts peaking and retreating back to 62 %Fib point, there has to be a reason why you would expect it to occur. I appreciate the "idea" of trading patterns and the "what to do's". I would like to know why it is possible to "trust" the patterns to work at all. I guess that is my quest. Do you need to know why they work or just accept that they do?

Perhaps somebody else here might offer their insight as well.



Thanks again