what do you think of patterns like triangles and flags in the 5 minute chart?they are reliable?, I would like to know if anyone has ever done an expert to do a backtest
what do you think of patterns like triangles and flags in the 5 minute chart?they are reliable?, I would like to know if anyone has ever done an expert to do a backtest
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Over the years, I have tested all the standard patterns over various markets and timeframes and the dominant conclusion I reached is that, over a big enough sample, close to 100% of all standard patterns across all timeframes, are effectively random if traded in a mechanical way, triangles & flags in 5 min charts included.
As a simple reality check, if any one pattern tested consistently better than random in any timeframe there would be many, many extraordinarily rich traders around - but there aren't.
To be consistently profitable you need an edge, and trade that edge in a consistent, disciplined and risk controlled manner.
The most consistent edge I have ever found is to trade with the trend. Pretty much all patterns traded with the trend are better than random in reliability terms, and vice-versa.
Pick any pattern and time frame you like then work at understanding the best market situation to trade it in. Then work at your discipline, consistency and risk control and you'll have a good chance of winning.
{quote} Over the years, I have tested all the standard patterns over various markets and timeframes and the dominant conclusion I reached is that, over a big enough sample, close to 100% of all standard patterns across all timeframes, are effectively random if traded in a mechanical way, triangles & flags in 5 min charts included. As a simple reality check, if any one pattern tested consistently better than random in any timeframe there would be many, many extraordinarily rich traders around - but there aren't. To be consistently profitable you...
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thank you for sharing your experience. I think the triangle pattern works well with a higher time frame trend analysis, and the exponential moving averages 7 and 20 to capture the swing in m5. This seems good on eur / usd from 9 am to 11am. What do you think?
{quote} thank you for sharing your experience. I think the triangle pattern works well with a higher time frame trend analysis, and the exponential moving averages 7 and 20 to capture the swing in m5. This seems good on eur / usd from 9 am to 11am. What do you think?
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To be honest, I don't know about the validity of your specific parameters but thinking and testing about how and when to use your chosen pattern is the right idea.
Markets are mostly random most of the time but not all the time. Discretionary traders have the freedom to search out those specific circumstances where things line up better than random for a trade. You find these sweet spots for your pattern & market and then trade with care and discipline. It's still only a probability, never a certainty, but it's a probability tilted in your favour by virtue of your hard work and that is where the edge and the profit lies.
Use what works and makes sense for you but use it intelligently and carefully. Best of luck!
These patterns like triangles and flags do work BUT you have to use them in the right context. What do I mean by this, for example if you get a flag formation that gives you buy signal but the overall trend is down then yeah probably you won't make money BUT if you trade patterns that are in line with trend they are profitable.
