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Profiting from simple classical chart patterns

  • #21
  • Mar 16, 2015 9:25pm Mar 16, 2015 9:25pm
Quoting EarnPipsNow
So far the channel on the NZD/CAD (5 min) is still holding tight. Notice the big price rejection at support level (red oval)
Here is a quick update on this channel formation on the NZD/CAD (5 min). Look closely, it seems like a breakout is in progress, right?

Nope, only total amateurs would buy this "breakout" at this early stage!

No Sir Mister Market, I want to see a REAL breakout with a REAL pullback before I even consider buying that NZD/CAD breakout.

And so should you.

Guys and gals, if you could only follow this simple rule, you would be way ahead of the pack...
Attached Image (click to enlarge)
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Each losing trade is an opportunity to learn
  • #22
  • Mar 17, 2015 5:57am Mar 17, 2015 5:57am
Quoting EarnPipsNow
{quote}WAIT FOR THE PULLBACK (OR AT LEAST SOME PULLBACK) AND THEN, AND ONLY THEN, BUY OR SELL! Yes you will miss a few moves (50% of breakouts or so never pullback to the breakout line) but you will also eliminate almost 100% of losing trades (keep in mind that most breakouts are false and the pros usually fade them). And even if you do lose, the stop is so close to your entry point that the loss should be negligible. On the other hand, you only need to catch a few good breakouts to make money.
Thanks for tips.
Im curious about entry on pullback. That breakout from channels may be a fake and pullback again goes in channel or pullback may retrace to broken trendline, then where we must enter. And some tips for valid channel and breakout please.
  • #23
  • Edited 3:48pm Mar 17, 2015 8:40am | Edited 3:48pm
Quoting aazishhunain
Im curious about entry on pullback. That breakout from channels may be a fake and pullback again goes in channel or pullback may retrace to broken trendline, then where we must enter. And some tips for valid channel and breakout please.
Oh, so you want to know all my little secrets, eh?

Ok here it is.

First of all, look at that red oval. Notice how the candlesticks are now completely above the breakout line and like free floating up in the air? Well this is the first thing I want to see in a breakout. On the other hand, if the candles just keep hugging the breakout line, that's not good.

This is the first step.

Now, see that red line after the red oval? Well I want the price to jump over that line and print at least 2 candles completely above it. Then I wait for a pullback to that line to pull the trigger and buy (little blue circle). The stop is the lowest low between the red oval and the pullback line.

One last thing, if the price exceeds the black line, I move the stop to break-even. I mean if the price is breaking out for real, it will rarely revisit the pullback line (red line) a second time. In this particular case, the break-even stop was triggered.

The first target is the black line at the top of the chart.

Well there you go, this is how I usually trade breakouts. It's nothing new, I am sure thousands of traders are using similar techniques.
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Each losing trade is an opportunity to learn
  • #24
  • Mar 17, 2015 3:22pm Mar 17, 2015 3:22pm
Inverted head and shoulders formation on the AUD/USD (30 min). The price is also below the 20 and 50 moving averages.
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Each losing trade is an opportunity to learn
  • #25
  • Mar 17, 2015 3:37pm Mar 17, 2015 3:37pm
Quoting EarnPipsNow
{quote} Oh, so you want to know all my little secrets, eh? Ok here it is. First of all, look at that red oval. Notice how the candlesticks are now completely above the breakout line and like free floating up in the air? Well this is the first thing I want to see in a breakout. On the other hand, if the candles just keep hugging the breakout line, that's not good. This is the first step. Now, see that red line after the red oval? Well I want the price to jump over that line and see at least 2 candles completely above it. Then I wait for a pullback...
Thanks a lot Man!!!!
Some new things for me. I've seen channels before but today I learnt some new things.
Thanks again Sir.
  • #26
  • Mar 17, 2015 3:42pm Mar 17, 2015 3:42pm
The AUD/USD is also forming a descending triangle on the 1h chart.

Oh boy, now we have two bearish chart patterns at the same time, a rare event indeed...
Attached Image (click to enlarge)
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Each losing trade is an opportunity to learn
  • #27
  • Mar 17, 2015 3:43pm Mar 17, 2015 3:43pm
Quoting aazishhunain
{quote} Thanks a lot Man!!!! Some new things for me. I've seen channels before but today I learnt some new things. Thanks again Sir.
You are welcome Aazishhunain.
Each losing trade is an opportunity to learn
  • #28
  • Edited 7:31pm Mar 17, 2015 4:05pm | Edited 7:31pm
You want another neat channel? Here it is on the CHF/JPY (5min). As always, when the channel is downtrend-ed we are looking for an UPSIDE breakout, don't bother with breakouts to the downside in this case, they are extremely hard to catch and the risk/reward ratio is very poor.

Well, you know what to do, I don't have to do your homework on this one, right?
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Each losing trade is an opportunity to learn
  • #29
  • Mar 20, 2015 7:23pm Mar 20, 2015 7:23pm
Quoting EarnPipsNow
Inverted head and shoulders formation on the AUD/USD (30 min). The price is also below the 20 and 50 moving averages. {image}
As you can see, the "breakout" on this head and shoulders formation was not a valid signal (see details on how to filter breakouts in previous posts).
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Each losing trade is an opportunity to learn
  • #30
  • Mar 20, 2015 7:35pm Mar 20, 2015 7:35pm
Quoting EarnPipsNow
The AUD/USD is also forming a descending triangle on the 1h chart.
Same thing here, the expected breakout to the downside had no follow through and was not a valid signal.

The real breakout happened the other way. Notice the huge pullback all the way back to the breakout line (red circle), a nice spot to initiate an extremely low-risk long position.
Attached Image (click to enlarge)
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Each losing trade is an opportunity to learn
  • #31
  • Edited 4:46pm Mar 25, 2015 4:35pm | Edited 4:46pm
EUR/CHF (15 min), how long will this upward channel last, especially if the price ever hits the resistance line just ahead (red line)...?
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Each losing trade is an opportunity to learn
  • #32
  • Mar 26, 2015 11:00am Mar 26, 2015 11:00am
Quoting EarnPipsNow
EUR/CHF (15 min), how long will this upward channel last, especially if the price ever hits the resistance line just ahead (red line)...? {image}
As expected the EUR/CHF (15 min) "escaped" from that upward channel and went down like a sack of potatoes. Notice the pullback to the uptrend line (red circle), an excellent place to initiate a low-risk/high-reward short position.
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Each losing trade is an opportunity to learn
  • #33
  • Mar 26, 2015 1:19pm Mar 26, 2015 1:19pm
Possible breakout in progress on the USD/CAD (5 min) . This is a pennant formation with bullish implications...
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Each losing trade is an opportunity to learn
  • #34
  • Mar 27, 2015 6:32pm Mar 27, 2015 6:32pm
Quoting EarnPipsNow
Possible breakout in progress on the USD/CAD (5 min) . This is a pennant formation with bullish implications... {image}
Alright, so what happened here?

Well, the pennant formation mutated into a neat symmetrical triangle (see chart below). And again, notice the pullback all the way back to the upper trendline (red circle) and the subsequent breakout move afterwards.

That's why I don't like pennant or triangle formations that much, they are pretty messy to deal with.

In any case, traders patient enough to wait for the pullback to pull the trigger would have made more than 120 pips in less than 24 hours.
Attached Image (click to enlarge)
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Each losing trade is an opportunity to learn
  • #35
  • Mar 27, 2015 10:51pm Mar 27, 2015 10:51pm
This thread is getting almost no interest apparently so I will stop posting.
Each losing trade is an opportunity to learn
  • #36
  • Mar 28, 2015 10:08am Mar 28, 2015 10:08am
Hi ENP - I see also that there's not been much interaction or comments on the charts. But regardless, they are valuable to me for sure. With a full time day job I have time to sneak peak charts occasionally throughout the week & evenings and your info is great for my purpose of going back to compare what you see to what I missed. I'm seldom able to trade during peak hours but intend to continue study until that time is available. So long story short -even though I (and maybe others) fail to interact on the thread, you do provide significant value imo. But your time is yours so I respect whichever you choose.
Thanks for what you've already presented.
  • #37
  • Mar 28, 2015 1:27pm Mar 28, 2015 1:27pm
Quoting dmostpips
Hi ENP - I see also that there's not been much interaction or comments on the charts. But regardless, they are valuable to me for sure. With a full time day job I have time to sneak peak charts occasionally throughout the week & evenings and your info is great for my purpose of going back to compare what you see to what I missed. I'm seldom able to trade during peak hours but intend to continue study until that time is available. So long story short -even though I (and maybe others) fail to interact on the thread, you do provide significant value...
Thanks for your comments Dmostpips. I am thinking of starting a blog similar to this thread, even though I have no clue on how to do that. I will keep you posted.
Each losing trade is an opportunity to learn
  • #38
  • Last Post: Feb 23, 2024 7:59am Feb 23, 2024 7:59am
Chart and Candle Patterns - Bulkowski (free access)

Example
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Example
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  1. Bulkowski's Chart and Candle Pattern Index - https://thepatternsite.com/chartpatterns.html
  2. Bulkowski on Chart Pattern Performance - https://thepatternsite.com/id75.html
  3. Bulkowski on the Top 10 Performing Candlesticks - https://thepatternsite.com/CandlePerformers.html

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