if ascending triangle has a 63% of chance to break out, then 80% of that fail? how does the math work lol....
anyway... to me this shit is all hog wash..
keep it simple... JBTFD lol... buying BO is for suckers who pay higher price lol.
It is a very complex exercise fraught with many dangers to reduce something down to simple.
This said:
I don’t know for sure as I have not studied Bulkowski’ concepts in depth (other than just a quick glance a few times over the years since I heard of him) but I suspect he is probably saying an ascending triangle has a 63% chance of a bullish BO as it’s final resolution when it, in fact, does actually BO. The 80% fail statement (not Bulkowski) simply means that any ONE attempt at a BO of the pattern has aprox an 80% chance of failing. If you prefer saying 70% that is fine too LOL. After all this is discretionary trading and that means subjectivity IS involved...ROFLMAO...which is anathema to mathematical mindsets which go into convulsions when math can’t measure 100% something such as market action because there exist too many variables..too many contexts...those (contexts and variables) known..unknown..and even unknowable..as they have yet to be invented!
So, after all the swearing and laughing at market uncertainty has died down lets get back to some math although it might be fudgeable math (if such a creature exists). LOL
Said another way, the chances that an ascending triangle will have a resolution to the bullish side is 63% (others may rate the % differently and if so any percentage difference probably has to do with the environment or larger context within which the ascending triangle pattern and the testing of it occurs). In other words, testing results turn out differently because of the context and well the sentiment of the moment (which can be included as part and parcel of the larger context). That will keep sentimental traders happy..LOL
Bottom line: Most BO or reversal attempts fail (80%). Sooner or later one will succeed. But, until a BO does succeed the trading tactic is to fade the BO and reversal attempts (if the sideways move is at least 3x vertically the size of a min scalp which I consider to be 1 pt in the ES). So, the height of the sideways move needs to be at least 3 points to employ a scalping technique. Better if more.
So, for instance, say price is in a trading range..sideways move. And the height of the move is 5 points. I am going to employ a scalping technique (and there are more than one) to capture 1 point of those 5 points and do so multiple times as the sideways movement progresses along. I know that eventually a BO will succeed but I don't know which one, nor when. Context (larger and immediate) can give me a clue as to which one (bull or bear) but I still don’t know WHEN. Darn, WD Gann and his concept of TIME in the markets might screw up my trading.
So I am really screwed because I don’t know the WHEN FACTOR? I beg to differ. Fudgeable math to the rescue.
So, I scalp both ways long and short, until WHEN happens. Fudgeable math .....I know any single BO attempt out of the top or bottom will fail (80%... 70% OR EVEN 60% if you wish to call it I don’t care....) then that, either way, gives me great odds for fading the BO attempts. Said another way I GOT ME AN EDGE contrary to the PRM (prudent risk management) theory being the only edge..propounded with sickening repetition by some unnamed traders..PS you can find them on ET...ROFLMAO.
In addition, when a BO, say out of the top fails and price reverses (bears pushing back or buyers and sellers both think price is in value area hence the range...however you want to look at it...i just prefer saying bears pushing back making the BO attempt fail..but whatever terminology you wish to use is fine by me LOL) I also am aware that the reversal attempt from the top of the range will probably fail. So once that reversal reaches the bottom of the range or close to it (within lower 1/3 or 1/4 of the range...I choose that 1/3 or 1/4 depending if I am planning on averaging down or not) any attempts to BO of the bottom, I JUST FIGURE it will fail, so I am making haste and going long NOT short. So, the reversal attempt from top of the range FAILS in IT’s BO attempt at the bottom of the range once it gets there. Therefore, both fail; the reversal from the top and the BO at the bottom. The same concepts are true for reversals and BO attempts at the top of the range. I just invert the process and reverse the tactic or whatever..you get the idea.
If I am mentally keen and psychologically ready I can exploit those odds. Most new traders see price race to the top of a range and think BO. So, they go long ..eyes wide open and bulging..thinking BIG $$$. Or they see price race to the bottom and short with $$ signs spinning their eyeballs in a rapidly increasing in rate of speed circles. Not realizing that either BO attempt has an 80% chance of failing! They are employing a failing tactical mini strategy. Of course, once in a while they do get lucky and happen to trade the BO when it does in fact become a successful BO so, unfortunately, that reinforces in their mind the concept of going long on a bull BO of a range or short on a bear BO of a range. So, the next 10 times they see a bull BO attempt from a range they buy it and lose, or BE, 8 times out of 10 because they get stopped out. Same thing selling a bear BO. After this happens multiple times they come to the conclusion that trading BO patterns does not work when in fact they do, if traded properly using fudgeable math ...Trading BO’s can work. Ask Crabel...Brooks..many other traders...you just gotta use the right kind of math...This is hilarious! ROFLMAO. FORGET MY FEEBLE ATTEMPTS AT HUMOR. FORGIVE ME. When I die they can just put on my grave marker “He Tried”.
JUST REMEMBER, MOST BO ATTEMPTS AND REVERSAL ATTEMPTS FROM A SIDEWAYS ACTION FAIL. ESPECIALLY, IF IT IS A TIGHT SIDEWAYS ACTION. THOSE ODDS GIVE AN EDGE AND CAN BE EXPLOITED.
Thank for listening to my ramble..if you don’t like it...well I don’t care..toss it in the garbage can...write it up as rubbish..mock it..laugh at it..degrade it...heaven knows I have been derided many times. Most of the time it is not me being derided but some concept I am expounding upon. Knowing that gives me no little comfort and preserves my ego of which I admit is probably larger than it needs to be. ROFL.
Damn the torpedoes full speed ahead TRADING.
Now I gotta go to church. Don’t laugh bye.
