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Can you trade only one pattern and be profitable?

  • #21
  • Oct 23, 2017 7:21am Oct 23, 2017 7:21am
Quoting Piquant
As the title says, Can you trade just one pattern and still be profitable ?
I would say the short answer is, Yes.

Reading your post it sounds like we've shared a lot of the same frustrations. My advice on whether or not you look to trade just one setup or punt for every setup out there would depend on the total number of setup types you've identified in your own trading arsenal. Personally I now look for just 4 x setup types (essentially a reversal, a double-top/bottom and a couple of continuation patterns). In my own perspective of the market these phases are essentially all that there is. And so I don't have any issue telling myself to trade all setups. If, however, you've identified say, 20 different setup types, then hunting for all of those in unison might be draining both financially and psychologically.

It's a juggling act and one of those situations, which I think is very subjective, and in many respects the answer can only be achieved with experimentation. But I do think one of the most important questions you need to ask yourself at this phase is, What exactly constitutes a setup? By going through this question you may find that some setups are redundant, or some might meld into others meaning they can be pruned to tighten things up. Obviously I don't know the figures but let's say you can whittle it down to 4 or 5 setups, the current challenge you're facing may be a bit easier to solve.
  • #22
  • Oct 23, 2017 8:46am Oct 23, 2017 8:46am
I say yes but be careful not to be over-optimized in defining your pattern. I've seen certain pairs have amazingly predictable and simple patterns for a few years and then just vanish.
  • #23
  • Oct 23, 2017 5:03pm Oct 23, 2017 5:03pm
By pattern, traders usually mean "entry pattern" or "entry signal". There are of course better and worse entry patterns, but a good entry doesn't on its own make a good trade. There needs to be a defined set-up before the pattern even appears, plus some criteria to judge the risk of this trade if all the other pairs based on the same currency are going the opposite way. Then there is the post-entry price action - recognition of the entry alone might be OK if you're looking for a quick in and out turnaround for some quick easy pips, but is that really the best way to balance risk against profit?

As an illustration, when I first started forex trading I was looking for consistent and established trends to join. I had a raft of entry patterns and tried to become fast and expert at recognising these, some were pretty subtle, some required a different chart set-up. At that time I was getting into every trend in the market and did nothing but make money as a result. But over time I worked out which entry patterns performed best and whittled out the poorer performers.

But the net result was I missed out on loads of good trend trades.

It turned out when I checked back that the entry patterns didn't matter - when I refined my range of entry patterns to just 1 or 2 or 3, I got fine entries, but missed lots of trend possibilities and stopped making money as a result.

Don't fall into the same trap of short-sightedness as me.
  • #24
  • Oct 23, 2017 6:05pm Oct 23, 2017 6:05pm
In short, yes.

we're all doctors so to speak. but some of us are foot and ankle. some specialize in heart surgery, neurosurgery etc you get the point.

there's no one way, buy YOUR way that you understand that works for you and that you've pinpointed and honed your skills for positive results.
  • #25
  • Oct 23, 2017 6:39pm Oct 23, 2017 6:39pm
Drop, Base Drop with a strong move away. Enter on the first retest to the zone where price left strong. Under normal circumstances were you have this thing called volatility price would be rejected like a racket ball at least price should stall there giving you time for either a retest entry, a deeper in the zone entry or as price leaves the zone in your preferred direction. Hope this helps...new to the thread...Tight lines and green trades! Come on Thursday Vol!!! ECB...ECB...
  • #26
  • Oct 23, 2017 8:12pm Oct 23, 2017 8:12pm
Quoting simond2002
{quote} By going through this question you may find that some setups are redundant, or some might meld into others meaning they can be pruned to tighten things up.
I've done lots of experiments (without even knowing what I was doing because I needed to make things works somehow) , and finally have come down to few patterns that worked over and over again, then I traded few of them, some of them and all of them with some degree of success to total failure. Now I'm at a stage where I know roughly what works and what doesn't. But we all know that isn't good enough. Like I said I have few in my toolkit, so I'm just trying to work out which ones worth focusing , or keeping.

I agree with you in that you'll need 3 or 4 types of patterns, I mostly trade tops or bottoms and I think I'm going to narrow my patterns down to 3. I've seen them across every pair I trade, so they are not pair specific. I guess I'm one step closer to making it ?? we'll see. But all I know for now, is that I'm not going to try to trade everything - because that backfired me, I kept losing and losing. Then I realized I needed focus - for some the solution might PA but for me it was to identify specific patterns higher the probability the better then at least it's not a 50/50 gamble which was what I have been doing the past few years.

Thanks for your feedback !
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  • #27
  • Oct 23, 2017 8:14pm Oct 23, 2017 8:14pm
Quoting hazelj80
In short, yes. we're all doctors so to speak. but some of us are foot and ankle. some specialize in heart surgery, neurosurgery etc you get the point. there's no one way, buy YOUR way that you understand that works for you and that you've pinpointed and honed your skills for positive results.
...
  • #28
  • Edited 11:38pm Oct 23, 2017 10:01pm | Edited 11:38pm
Quoting Piquant
{quote} I've done lots of experiments (without even knowing what I was doing because I needed to make things works somehow) , and finally have come down to few patterns that worked over and over again, then I traded few of them, some of them and all of them with some degree of success to total failure. Now I'm at a stage where I know roughly what works and what doesn't. But we all know that isn't good enough. Like I said I have few in my toolkit, so I'm just trying to work out which ones worth focusing , or keeping. I agree with you in that you'll...
Try using the "2nd-chances" strategy ...
From my experience, it will be a lot easier when we have a predetermined SL and TP because we can scrap the trying when the SL or TP is reached first ...
Market is not random but unpredictable
  • #29
  • Nov 4, 2017 7:31pm Nov 4, 2017 7:31pm
Sure, one can rely on only one trade pattern and be profitable with it. In fact, the more the patterns, the higher the likelihood of getting confused when looking out for trades to take. But for me, the most profitable trades are those whose price levels are gleaned over from large orders stacked up at big banks & clearing houses.
  • #30
  • Nov 4, 2017 10:44pm Nov 4, 2017 10:44pm
Quoting PipNerd
Sure, one can rely on only one trade pattern and be profitable with it. In fact, the more the patterns, the higher the likelihood of getting confused when looking out for trades to take. But for me, the most profitable trades are those whose price levels are gleaned over from large orders stacked up at big banks & clearing houses.
There you go that's your "pattern"

I agree on being confused trading more than 4 to 6 types of patterns.
I have been there.
The irony is that the more patterns you try to trade the more losses you'll encounter.
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  • #31
  • Nov 5, 2017 8:24pm Nov 5, 2017 8:24pm
Without a context I wonder if pattern trading will generate consistent result.

Context I feel like should be given more thought than pattern itself.

Do you agree or disagree ?
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  • #32
  • Nov 5, 2017 9:16pm Nov 5, 2017 9:16pm
Quoting Piquant
Without a context I wonder if pattern trading will generate consistent result. Context I feel like should be given more thought than pattern itself. Do you agree or disagree ?
Try using the “2nd-chances” strategy ...
Let’s say a pattern is formed suggesting us to take a trade with its SL and TP predetermined. We then wait for a correction/retracement to occur before opening that trade provided neither the SL or the TP is reached first, yet the entry price could be worse or better than the initial intended price ...
This strategy is best used when playing breakouts ...
Market is not random but unpredictable
  • #33
  • Nov 5, 2017 9:51pm Nov 5, 2017 9:51pm
Quoting 4for4
{quote} Try using the “2nd-chances” strategy .This strategy is best used when playing breakouts ...

Are we on the same page ? refer to the attached chart.

Thanks for the suggestion btw, you've mentioned this before I remember.
That's a good context, but whats your content ? I mean do you need a pattern in case of a breakout - pullback to S or R - retest setups ?

<I think I'm seeing what I should be looking for>
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  • #34
  • Nov 5, 2017 10:13pm Nov 5, 2017 10:13pm
I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times. Bruce Lee


I had that same problem. i kept blowing accounts for years, even with the knowledge that one certain type of setups were good enough to be profitable, i would keep trading the rest and there was no end in sight.

Problem was that on a conscious level i knew what was what but my subconscious would trick me into thinking that i will make very small money if i did not take/master these opportunities.

Only thing changed when i started logging my trades in excel with screen shots and separated the setups and results were amazing. A day where i lost 10% would turn into a positive 3-4%.

Now i dont even blink when i see other setups. Cause i have hard evidence to show to my subconscious.

DONT BE LAZY AND GATHER HARD EVIDENCE TO SHOW TO YOUR SUBCONSCIOUS.
  • #35
  • Nov 5, 2017 10:26pm Nov 5, 2017 10:26pm
Quoting Piquant
{quote} Are we on the same page ? refer to the attached chart. Thanks for the suggestion btw, you've mentioned this before I remember. That's a good context, but whats your content ? I mean do you need a pattern in case of a breakout - pullback to S or R - retest setups ? <I think I'm seeing what I should be looking for> {image}
The chart showed a break-down @ around 133.06 during the 0900-1200 period which prompted us to sell ...
Using 1R-calculation with SL @ around 133.13, we get a TP @ 132.99 ...
As we can see, the TP was reached in one swing without any correction, thus the 2nd-chance attempt should be aborted for now ...

Looking ahead, I will wait for a substantial upward movement first and see if the 133.13 level can be broken or not ... If not, another selling opportunity might be abound ...
Market is not random but unpredictable
  • #36
  • Nov 5, 2017 10:52pm Nov 5, 2017 10:52pm
Quoting 4for4
{quote} thus the 2nd-chance attempt should be aborted for now
oh yes the 2nd chance strategy is aborted.
but I don't fully understand what you're saying there

in my opinion consider that I'm still fairly new with this context so if you have to correct me please go ahead, I have a feeling this approach would work better in a range breakout 1st leg up pullback kind of scenario. What do you think about that ? as in the case of GJ
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  • #37
  • Nov 5, 2017 11:39pm Nov 5, 2017 11:39pm
Quoting Piquant
{quote} oh yes the 2nd chance strategy is aborted. but I don't fully understand what you're saying there in my opinion consider that I'm still fairly new with this context so if you have to correct me please go ahead, I have a feeling this approach would work better in a range breakout 1st leg up pullback kind of scenario. What do you think about that ? as in the case of GJ {image}
In the above chart, the sell-setup happened around 149.40 (the last red candle) with initial SL @ around 149.80, giving us a TP @ 149.00 ...
The last candle is now consolidating ... If it makes a harami or breaking high but not beyond 149.70, a 2nd-chance will present itself when the market makes another break-down @ around 149.30 for the calculated TP of 149.00, SL @ 149.70 or newly formed peak ...

SL can be trailed as new peaks are formed as long as the trade is still alive ...
Market is not random but unpredictable
  • #38
  • Nov 5, 2017 11:51pm Nov 5, 2017 11:51pm
Quoting 4for4
{quote} In the above chart, the sell-setup happened around 149.40 (the last red candle) with initial SL @ around 149.80, giving us a TP @ 149.00 ... The last candle is now consolidating ... If it makes a harami or breaking high but not beyond 149.70, a 2nd-chance will present itself when the market makes another break-down @ around 149.30 for the calculated TP of 149.00, SL @ 149.70 or newly formed peak ... SL can be trailed as new peaks are formed as long as the trade is still alive ...
for me that was a buy.

it's amazing how our point of reference can be so drastically different.
nevertheless thank you for mentioning the word "2nd chance" I may not be able to understand where you're coming from and we may not be on the same page but as far as the word 2nd chance is concerned I have understood something that I might be able to use for my advantage which may provide a context for my pattern.
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  • #39
  • Nov 6, 2017 12:02am Nov 6, 2017 12:02am
Quoting Piquant
{quote} for me that was a buy. it's amazing how our point of reference can be so drastically different. nevertheless thank you for mentioning the word "2nd chance" I may not be able to understand where you're coming from and we may not be on the same page but as far as the word 2nd chance is concerned I have understood something that I might be able to use for my advantage which may provide a context for my pattern.
Yes, that’s why the market is so unpredictable ...
Btw, which pattern are you basing your perspective on? ...
For me, the 1234-Sell-Pattern is clearly shown on the breakout that I mentioned ...
Market is not random but unpredictable
  • #40
  • Nov 6, 2017 12:27am Nov 6, 2017 12:27am
Quoting 4for4
{quote} Yes, that’s why the market is so unpredictable ... Btw, which pattern are you basing your perspective on? ... For me, the 1234-Sell-Pattern is clearly shown on the breakout that I mentioned ...
I clearly did not see 1234 sell pattern but a buy 123 pattern
Ironically I call them 123 pattern , they tend to form around potential support areas.
I was looking for a context where I could trade this pattern and variations of it with a success rate of 60% and above.
The only way I realized where I could achieve that, was to find a "context"
And your 2nd chance strategy along with breakout - I had my "aha" moment. God knows if that will be something that I could rely on in the long run..
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