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In a message dated 7/27/98 9:56:56 AM, jerrywhi@xxxxxxxxxxx wrote:
<<Conclusions:
>
>A I found in this exercise that SIGNIFICANT reversal swing high/lows
>ALWAYS had at least one or two or more clear candlestick reversal patterns
>associated with them within the complete set of .gif files produced for that
>reversal per the above steps.
>
>B It appears to me that if any set of bars that contain a reversal don't
>exhibit a candlestick pattern this is due to the timing of the reversal
>high/low within the bar period and the magnitude of the reversal.
>>>
Better be careful here. Just because a certain pattern appears at tops and
bottoms doesn't mean you can make money trading that pattern.
Years ago we tested key reversal patterns which can be observed at many tops
and bottoms. We found numerous examples where they worked. Problem was all
the "false positives" or times that the signals didn't work. We concluded we
couldn't afford to have six losses for every winner even though we could catch
numerous tops and bottoms.
Chuck
traderclub.com
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