Pattern Trading

aca_trader · #**381** 22nd May 2007, 10:09 AM

Quote:

Originally Posted by marcus

Ashish, was wondering if you could incorporate mark crisp's 123 pattern into your thread, he claims a 70% success rare.

Also as per your past work can you tell us which patterns have the highest success rate thus far, the patternz guy has compiled a list but I don't think its well researched and doesn't seem to be very accurate.

Oh and lastly where are you!

Hi Marcus!

It's wrong on part of Mark Crisp to claim that 1-2-3 pattern is something of his own invention though the success rate is certainly impressive. May be more than even 70.

Basically, 1-2-3 pattern is nothing but pivots with a change in the direction of trend. For example, if a secutiry is in downtrend, then when it starts making higher highs and higher lows, it would form 1-2-3 pattern and that is the time to start buying the security. Same is the case when markets turn from bullish to bearish, they start making lower highs/lows and result in 1-2-3 pattern. The chart examples are abundant in Saint's thread of "Teaching to Fish".

So far as patterns are concerned, I personally rank Head & Shoulder as number 1 in performance while the formation rate is highest for triangle. However, if we learn to trade both successfull and failure patterns, most of the pattern will start performing for us. Check out the chart of Indiabulls where I was forced to change my view from bearish to bullish in one single day but compared to loss on short side, the profit on long side was phenomenal. Forexample, what will happen if a H&S pattern does not work, one will certainly loose money on short side but when the price crosses the head, it will cause a parabolic rally in the stock.

On personal front, I have shifted to Hyderabad and plan to start an Asset Management & Advisory Company with few like-minded people.

Best Regards,
--Ashish

bvpraveen · #**382** 22nd May 2007, 10:21 AM

Quote:

Originally Posted by aca_trader

....
On personal front, I have shifted to Hyderabad and plan to start an Asset Management & Advisory Company with few like-minded people.
...

Thats great. Congrats and all the best, buddy.

Praveen.

marcus · #**383** 22nd May 2007, 03:23 PM

Hi Ashish,

Thanks for the quick reply and all the information, I actually thought Mark Crisp did indeed discover the 12 pattern formation as he's written a book on the technique which I think is available in the download section. Well thanks for telling me otherwise, but whats most interesting is the pattern does indeed seem to suceed much more than any other, Crisp himself says should you choose to master any one pattern, this should be it.

Another pattern very very similar to 123 is the cup and caps technique used by Joe Stowell, apparently he was a teacher and claims to have discovered this pattern which he says is his most used trading technique.

I read about it in the book "18 trading champions share their secrets" but the article is here as well http://www.global-investment-institu...oe-stowell.htm

I hope some of the members incorporate both "123 pattern" and "cup and cap pattern" into this thread.

I wish you every success in your new venture.

uasish · #**384** 22nd May 2007, 03:36 PM

Best of Luck ,Ashish.

Asish

Saint · #**385** 22nd May 2007, 05:34 PM

Quote:

On personal front, I have shifted to Hyderabad and plan to start an Asset Management & Advisory Company with few like-minded people.

Best Regards,
--Ashish

All the best in your new endeavour,Ashish.

Saint

kkseal · #**386** 23rd May 2007, 01:08 AM

Quote:

Originally Posted by aca_trader

Hi Marcus!

On personal front, I have shifted to Hyderabad and plan to start an Asset Management & Advisory Company with few like-minded people.

Best Regards,
--Ashish

That's great news Ashish!

You are knowledgeable enough for such a business. Your Technical knowledge is evident from this thread itself and being a CA you would also have good understanding of the Fundamentals.

Wishing you the very best.

Regards,
Kalyan.

kkseal · #**387** 23rd May 2007, 01:18 AM

Quote:

Originally Posted by marcus

Hi Ashish,

Thanks for the quick reply and all the information, I actually thought Mark Crisp did indeed discover the 12 pattern formation as he's written a book on the technique which I think is available in the download section. Well thanks for telling me otherwise, but whats most interesting is the pattern does indeed seem to suceed much more than any other, Crisp himself says should you choose to master any one pattern, this should be it.

Another pattern very very similar to 123 is the cup and caps technique used by Joe Stowell, apparently he was a teacher and claims to have discovered this pattern which he says is his most used trading technique.

I read about it in the book "18 trading champions share their secrets" but the article is here as well http://www.global-investment-institu...oe-stowell.htm

I hope some of the members incorporate both "123 pattern" and "cup and cap pattern" into this thread.

Saint's threads are the best illustrations of the 1-2-3 pattern. You can learn much more about the pattern from his methods, posts & charts than you can from any book.
The cups-n-caps pattern is too inconsistent for my taste.
In my view time-tested pattterns are much better than the new ones that crop up every other day.

Regards,
Kalyan.

aca_trader · #**388** 23rd May 2007, 10:07 AM

Dear Friends!

Thanks a lot for your wishes.
I hope I am able to put to use what I learnt from the members of the forum.

Best Regards,
--Ashish

aca_trader · #**389** 23rd May 2007, 10:27 AM

Quote:

Originally Posted by marcus

Hi Ashish,

I hope some of the members incorporate both "123 pattern" and "cup and cap pattern" into this thread.

I wish you every success in your new venture.

Hi Marcus!

First of all, Thanks a lot for your wishes.

A quote from the referred article "In a cup, the first bar would have a higher close (or low), the middle bar has a lower close (or low) and the third bar has a higher close (or low)," Stowell added."

When I visualized this pattern, I found that it's nothing but pivots. If you take lows, the bar charts would tell that this is a pivot and in case of closes, line chart would indicate a pivot formation.

Now a pivot can be traded both ways. If the pivot is formed in an uptrend, one can take position above the high of the third bar with SL below low of the middle bar. The assumption here is that prices will go back to atleast the previous peak. If the SL is hit, one may reverse the trade as it would mean that the uptrend is not valid.

Once again, Saint's Thread is the most valuable source about trading with the help of pivots.

Best Regards,
--Ashish

kkseal · #**390** 23rd May 2007, 09:21 PM

Quote:

Originally Posted by aca_trader

Hi Marcus!

A quote from the referred article "In a cup, the first bar would have a higher close (or low), the middle bar has a lower close (or low) and the third bar has a higher close (or low)," Stowell added."

When I visualized this pattern, I found that it's nothing but pivots. If you take lows, the bar charts would tell that this is a pivot and in case of closes, line chart would indicate a pivot formation.

Actually it's a bit different. Stowell looks for the 'cup' near a swing/pivot high & the 'cap' near a swing/pivot low (which is a bit counter-intuitive). But the problem is that the patterns sometimes forms too early or too late (and on many occasions they do not form at all).

1-2-3 is definitely more reliable, but has the disadvantage of late entries & exits.

Regards,
Kalyan.

Similar Threads for: Pattern Trading
Thread	Thread Starter	Forum	Replies	Last Post
Trading With Chart Pattern	soumya_b	Technical Analysis	214	13th December 2008 05:25 PM
The Head and Shoulders Pattern	Traderji	Technical Analysis	11	1st November 2007 06:53 PM
NTPC Chart Pattern	gcvikranth	Trading on Technicals	4	27th November 2006 09:09 PM
Gold intraday pattern	CageRattler	Metals	0	30th October 2006 02:57 PM