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Hi,
I use several patterns, and they work very well, a
high percentage of the time.
I don't think anything can work consistently as you say,
there will always be losing trades along the way.
It's important that the patterns you use are
clearly defined, to reduce guessing. Although
the patterns I use have firm rules and definitions,
there is some room for human discretion.
The first decision is whether the pattern is "pure enough"
to make a trade. Then the decision is whether the pattern
is a "picture-perfect" one or less perfect. This
discretion effects the size of my trade and sometimes whether
I have a large or smaller profit objective, but not the
place where I enter the trade....
Use firm rules, but don't shut out your most important
tool - the human mind. Don't try to make everything mechanical.
Stan asked:
>Is it possible to determine which occurrences of a pattern are most likely
>to be profitable?
Yes! Do what I did. First study the pattern on many charts, historically.
Then,
if the outcome is optimistic, trade the pattern with small positions. Then
later trade the pattern with full sized positions. Any pattern that
passes this test is obviously a "winner". (Sorry, I don't believe in
back-testing
short-cuts, though I'm sure someone has succeeded that way too.)
-Neal.
At 06:34 PM 11/15/00 -0700, you wrote:
>-----Original Message-----
>From: Ira Tunik [mailto:ist@xxxxxx]
>Sent: Wednesday, November 15, 2000 3:57 PM
>To: realtraders
>Subject: [RT] patterns and systems
>
>
>I have read a lot about patterns lately in this group. The cup and
>handle has come up a great deal of late. The bad thing about these
>patterns, whether it be cup and handle, head and shoulders, pennants,
>flags or any of the other myriad of formations is that they don't work
>consistently enough to base a trade upon. You are always guessing and
>under many market conditions these guesses are incorrect.....
>
>---------------------------
>
>
>Is it possible to determine which occurrences of a pattern are most likely
>to be profitable?
>
>Has anyone looked at pattern/indicator corrrelations (for example, momentum
>or accumulation studies)?
>
>There otta be a way.
>
>-Stan
>
>
>
>To unsubscribe from this group, send an email to:
>realtraders-unsubscribe@xxxxxxxxxxx
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