Pattern Trading [Actual trading, not educational]

#1
Hi,

What this thread is NOT :
This is not an eductional thread, ie if you dont already trade / recognize patterns, this is not the thread you would be looking for, however you could go to

http://www.traderji.com/technical-analysis/45193-my-charts-yours-too.html

Thats the one i know of, very interactive and could help you with queries.

'=======================================================

This thread is intended for those who actually understand and trade Patterns. I dont mean 'to perfection', but at least to a point where one knows a good pattern when one sees it, togather we'll take it from there :)

We shall try to deal with the finer points in patterns.

ie Core pattern traders.

I intend to post patterns i see developing and you could do the same if you choose to, we can discuss entries / exits / SL and validity of patterns.

Posting below some pattern ive seen developing but didnt trade :( so i thot it might as well benifit everyone if we have a place we could discuss patterns so everyone gains.

Bringing Elliotts into the picture and a bit :

- A good pattern is one that leads to an impulse. There are no pattern failures... patterns 'fail' when one enters a corrective wave etc.

- I usually stick to TRIPLES, ie if im looking at a triangulation i look for three touches to each side, gives better runs and fewer hits than looking at 2 touches. There are very few patterns i trade on two touches to a side.

- The structure of bodies within a pattern is critical, well structures self-respecting bodies indicate an impulse... ie stock is biding its time till a breakout, wide structures within a pattern are likely to occur in a 4th wave or a corrective wave, we will avoid trading them.

Pattern trading helps eliminate 'guess-work', 'feeling' and 'it-coulds' ... lets make the best of it :)

Thanks.
 
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EagleOne

Well-Known Member
#3
Lage raho mere pyaare Munnabhai!

You should have taken Can Bank, baby! Yummy-yummy!:p

Best wishes, and thank you for your efforts on this thread.
 
#5
Patni :

Triangulating, 2morro should see a direction. Possibly south, but have no opinions till markets open.

Given that a recoil took it up to the lower trendline, an immideate force may not be seen.

Other possibilities to keep in mind (so one doesnt hold position and hope) :
A truncated 5th may mean it would never pierce the low made on 19-05-2011.

Emperically, previous bodies high is not penetrated on a short, so its a good SL IMO. Or a breach of the lower Trendline could serve as a SL.

Opinions invited.

 

EagleOne

Well-Known Member
#6
RE
Regarding your Patni chart. You say, 'High vol, long lower shadow, nothing abnormal'.

A long Bearish Vol bar trying to pull the stock down, and all it could was to end up creating just a long shadow!? Nothing abnormal?:p

Think again. Remember our recent talk on Yes Bank? ;)
 
#7
RE
Regarding your Patni chart. You say, 'High vol, long lower shadow, nothing abnormal'.

A long Bearish Vol bar trying to pull the stock down, and all it could was to end up creating just a long shadow!? Nothing abnormal?:p

Think again. Remember our recent talk on Yes Bank? ;)
Long lower shadow on abnormally high volumes is marked not abnormal because it is very specific to a shallow long triangulation of this kind.

Below are two of many instances of long lower shadows on high volumes occuring on the break-down day of this pattern.

Of-course long lower shadows on high volumes mean something, but we're talking about the finer points of how things work within a very specific pattern.

There are shallow triangles, deep triangulations, triangulations on an impulse, triangulations on a correction, reversal triangulations,

As you can see, each has a very very very specific set of characterstics.

And as i mentioned before, till that low on 19th something is crossed on a closing basis, Patni could head up after a truncated 5th.

The reason i called it not abnormal is exactly this. One should not confuse it with a long lower shadow high volume day one has seen elsewhere and pre-judge it bullish.

We're crossing t's and dotting i's in patterns.

Good you brought that up, thanks.



 
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linkon7

Well-Known Member
#8

image hosting

A different perspective on the same chart under study...!

Patni is trading between a range of 319 to 365.
Momentum oscillator show a total lack of interest on either direction. Typical of accumulation/ distribution pattern.

Any dip on price is a good buying opportunity as there were 3 instances where bulls showed buying interest below the 319 mark. Bottom of a trading range, I would rather nibble at this scrip with sl at 314 mark.

I wouldnt short this at break of 314. I prefer a retest of 319 mark from below and subsequent failure to break the 319 mark as a good setup for me to short.
 
#9
** inverted colors on quoted chart **



A different perspective on the same chart under study...!
......

I wouldnt short this at break of 314. I prefer a retest of 319 mark from below and subsequent failure to break the 319 mark as a good setup for me to short.
Thanks.

The lack of buying / selling interest is prolly owing to that the stock is 'flat' or 'triangulating', basically going nowhere.

And its true as per price structure too.

Interesting to note :
Canbank triangulation had two gap-downs at the peaks (02-06-2011 and 06-07-2011, in-fact the triangulation was a set of waves closing the gaps. [fun-fact for MTV].
Patni, on the other hand doesnt show bearish urgency within the triangulation.

If the trendline is valid and the stock bearish we should see a move 2morro. Low and close of 19-05-2011 also become critical to breach on a closing basis IMO.
 

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