Trading Patterns | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Harmonic trading-harmonic patterns 527 replies

Opportunities in Forex Calendar Trading Patterns 3 replies

Expose Yourself! A Powerful Technique for Breaking Emotional Patterns in Trading 0 replies

Calendar Yen Trading Patterns 4 replies

CHF, EUR and GBP Calendar Trading Patterns 0 replies

Trading Patterns

  • #1
  • First Post: Sep 9, 2015 12:18pm Sep 9, 2015 12:18pm
I have come to the conclusion that trading pattern formations is the way to a life of financial freedom.

I decided to drop my PA strategies that I have been testing for months (which were averaging about 20 pips a week...), and decided to dedicate all my efforts into perfecting pattern trading.
I have noticed that there aren't many people on FF who trade these, so I wanted to start thread to rally those of you who have traded or currently trade patterns to discuss methods and tactics.
  • #2
  • Sep 9, 2015 12:59pm Sep 9, 2015 12:59pm
I share your perception that there probably aren't many people here trading these, but would you mind clarifying what you mean by "pattern formations" and "PA" trading, please?

I ask because I honestly don't know whether you'd consider some/many of my routine trading methods as "pattern formations" or not, but they're certainly "PA techniques", so I'm not quite sure how you're distinguishing between the two? For myself, I see "PA trading" as meaning more or less trading without indicators, or at the very least trading without primary indicator-dependence regarding entering/exiting positions. I would therefore include trading from pattern formations as a "subset" of PA trading. But I think from the way you mention abandoning PA in favour of patterns that you perhaps see/define this rather differently?
  • #3
  • Sep 9, 2015 9:48pm Sep 9, 2015 9:48pm
Quoting tmcwil5517
I have come to the conclusion that trading pattern formations is the way to a life of financial freedom. I decided to drop my PA strategies that I have been testing for months (which were averaging about 20 pips a week...), and decided to dedicate all my efforts into perfecting pattern trading. I have noticed that there aren't many people on FF who trade these, so I wanted to start thread to rally those of you who have traded or currently trade patterns to discuss methods and tactics.
I encourage you to read Al Weiss' interview in The New Market Wizards.
  • #4
  • Sep 11, 2015 5:34am Sep 11, 2015 5:34am
Quoting Xela
I share your perception that there probably aren't many people here trading these, but would you mind clarifying what you mean by "pattern formations" and "PA" trading, please? I ask because I honestly don't know whether you'd consider some/many of my routine trading methods as "pattern formations" or not, but they're certainly "PA techniques", so I'm not quite sure how you're distinguishing between the two? For myself, I see "PA trading" as meaning more or less trading without indicators, or at the very least trading without primary indicator-dependence...
I agree that patterns count as PA, I should have mentioned that I traded PA more loosely with pivot points, and didn't really look for actual patterns other than your basic candlestick formations.

@Atokys, I will read it right now
  • #5
  • Sep 11, 2015 6:25am Sep 11, 2015 6:25am
A starting point for you in your pattern research might be to distinguish trending markets from neutral (sideways) markets. I have found that similar or even identical patterns work differently depending on the type of market (trending or neutral) that one is analyzing. Trending markets seem to yield more consistent outcomes and , in my opinion, have fewer variables to deal with. I would also suggest for the purpose of analysis it would be easier to start with longer time frames, 4H or larger, again to minimize detail allowing you to concentrate on conceptual themes rather than minutiae,although at some point you'll have to return to the nittygritty detail in order to get things to work consistently,
  • #6
  • Sep 11, 2015 6:56am Sep 11, 2015 6:56am
Quoting eyeball
A starting point for you in your pattern research might be to distinguish trending markets from neutral (sideways) markets. I have found that similar or even identical patterns work differently depending on the type of market (trending or neutral) that one is analyzing. Trending markets seem to yield more consistent outcomes and , in my opinion, have fewer variables to deal with. I would also suggest for the purpose of analysis it would be easier to start with longer time frames, 4H or larger, again to minimize detail allowing you to concentrate...
I honestly don't plan to look at anything below the 4H tf. I feel as though anything below 4h is too unreliable and susceptible to market anomalies.
I have been reading Thomas N. Bulkowski's Encyclopedia of Chart Patterns, and the book suggests to trade only daily charts (he tackles the stock market), but I'm thinking that since the FX market is much more volatile, and not so bullish, it would be wiser to trade 4H charts since things happen much quicker. I may even be convinced to look at 1H charts too if the evidence of potential is compelling enough.
  • #7
  • Sep 11, 2015 7:12am Sep 11, 2015 7:12am
Quoting tmcwil5517
@Atokys, I will read it right now
Just a few things I would like to point out about that guy:

- He spent 4 years learning about patterns and developed his technique based on a comprehensive study of Markets. I believe it is important to design a system based on one's understanding of the market and not based on one's hope for massive profit.
- His method seemed systematic and not discretionary despite being based on chart patterns.
- He recognises that even patterns that only work 50% of the time can produce a profitable trading plan.
  • #8
  • Last Post: Sep 11, 2015 10:54am Sep 11, 2015 10:54am
Quoting Atokys
{quote} Just a few things I would like to point out about that guy: - He spent 4 years learning about patterns and developed his technique based on a comprehensive study of Markets. I believe it is important to design a system based on one's understanding of the market and not based on one's hope for massive profit. - His method seemed systematic and not discretionary despite being based on chart patterns. - He recognises that even patterns that only work 50% of the time can produce a profitable trading plan.
I finally found the book on pdf and read his interview at http://www.beursplaza.com/ebook7.pdf
I personally plan to dive into the historic charts as well, maybe for as long as him. I definitely want to be able to get more familiar with market cycles, that was the most interesting thing I read in the interview. I feel as though that is necessary for a life long trading career
0 traders viewing now