"Anti" pattern

Hi,

I don't know if this has been discussed in this forum, I didn't find any posts on it. I am wondering if anybody has ever tried the "Anti" pattern used by Linda B. Raschke. The system was thought for scalping, but it can be applied on many timeframes and pairs. The setup seems to be working in most cases. Here is how it works for a buy signal:

- %D has established a definite uptrend
- %K has begun to rise along with the slow line
- a retracement causes %K to pull towards the slow line
- enter when price action causes the fast line to turn up once again in the direction of %D (forming a hook

- stop level: just below the bar of entry (can also be the last swing low)
- exit level: within 2 to 4 bars

Rules are opposite for sell signals. The system has been described here and updated in the "Stree Smarts" book. Here is an example:

http://i40.tinypic.com/2dw6o0l.jpg

I would personally add a 50 EMA filter to weed out bad signals (only long signals if the slope of the EMA is going upwards and only short signals for the reverse), but there doesn't seem to be many.

Interesting post...

Chamane, how has the "Anti" pattern trading worked out for you? What time frames seem to work best with this strategy? My personal preference would be for longer time frames.

Thanks for sharing!

BC

and..can you also share that "zone" indicator that appears on your chart?

The system seems to be working on all timeframes. In the article I am refering to in my first post, the "Anti" is used for scalping, but in the "Street Smarts" book, it is applied on Daily charts. Like you, I would prefer longer TF but it depends on your style of trading. I am usually more comfortable with longer and more stable TF although I discovered this technique while looking for scalping strategies. It doesn't work all the time (see red arrow in the pic) like with any other strategies, but I like what I see visually. I am not trading it right now, just backtesting and trying to add filters (like only trading in the direction of the 50EMA and outside overbought/oversold zones) and different setups like Sto (14,20,8).

http://i41.tinypic.com/xc2nx4.jpg

There is no indicator that I know of for this. I just drew the zones manually in an image editor.

From LBR site:

What is an "Anti" Setup?
"The Anti looks like a small bull or bear flag pattern that occurs either in the middle of a trading range or just after a market has reversed from a sustained trend move. Classic bull or bear flags are continuation patterns that can only occur in a market that has a well-defined trend. Sometimes an Anti will look like the middle retracement of an A-B-C pattern. Thus, we are able to get a measured move objective that is based off the prior swing. The Anti MUST be preceded by a short-term IMPULSE move. Buy Antis are more frequent than Sell Anti setups. The long trades will have the best odds of success if the prior up leg is GREATER than the previous down leg. Oscillator pattern recognition based on either the 3/10 oscillator or a 7-period %K, 16-period /%D combination of stochastics can also be used to identify this setup."

Let's explore the possibilities further...I think we are on to something good...

BC

I don't know if i'm allowed to, but I am adding quotes from the Street Smarts book regarding the technique:

"When the %K and %D have formed opposing slopes for at least three days, creating a tension between them, place a buy stop one tick above the previous day's bar. (This will be to go long when %D has returned to a positive slope.). If the buy stop is not hit, keep on trailing it down to the high of each previous day's bar".

"A trend line can also be drawn across the tops of the congestion or retracement pattern. Sometimes this setup captures moves out of small "flags" or "drift" patterns. Other times it captures beautiful moves out of setups that the eye would not normally pick out on a price chart.".

Those are trigger signs that should help identify entry points. I also think the method should be investigated more. Feel free to post any comments.

Thanks

This pattern went down hill so fast that no one has posted on it since 2010? What I was wondering is...at $350 a month for her room, is she making more money as a trader or as a marketer and writer? If you asked me which of her incomes would I take, sight unseen right now...give me her book selling,writing, chat room, newsletter and conference revenue. I say she gets 80% from that and 20% from trading. I always suspect that when a pro trader has so much time to give lectures and put out newsletters, write books and columns and still trade full time. Gotta hand it to her though, she is one of the very few who has milked this internet trading bandwagon for so long. Yet, every time I go to Amazon to review a book of hers, I never buy anything. I am pondering throwing $10 away one of these days for a trial in her room. Just those $10 bills Id love to have and Id almost give up trading. -)

I think she has a secret....she doesnt SOUND like a speaker or used car salesman like Oliver Velez, Cramer, and half the people who have their own trade room. She sounds real.

Interesting pattern, but what is %K and %D?

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Let me add to my last comment 3 posts ago......do you all notice that all the traders in Market Wizards are not selling services in chat rooms or hawking newsletters or software? Why? They could help a lot of people. Are they damn selfish, or is this just telling us that great traders have no time to help others.
Ed sekoyta who claims to have a charity set up, is the only one I know who helps other traders AND poor people. Oh here is the best one yet!.........I was considering very long and hard on whether to join a trading room organized by O.V., and when his moderator told me he helped 20 batterd women learn how to trade and gain independence, a week later I forked over thousands to be in his room called "Trade for Life." and my life ended 1 year later when he went under after taking over 1000 peoples money all over the world!!!!! "I love helping traders so they dont have to go thru what I did" he claimed.

I think Linda B. Raschke is one of the real traders.

That sucks about the "Trade for Life" thing. I heard about that.