In response to the original question posed at the start of the thread there would now seem to be opinions that would certainly indicate that charts are a rather inefficient tool to profiting from financial markets.
What it is, happens to be something completely different. Force fitting of triangles does not solve the problem of price action deduction. You can look in a chart and see anything you want to see as a consequence of not looking at it correctly, that is from the correct perspective
So we have a psychological explanation for a charts shortcoming, a perceptual bias.
Matt, don't get disheartened. Unless I've missed it, nobody has said how you would trade this situation (going forward) given the data provided.
The crux of the matter, no-one has proffered an analysis going forward, which of course to profit is rather a necessity, unfortunately hindsight analysis does not pay terribly well.
The mind seeks to impose "pattern" in order to easily understand and sometimes "sees" what isn't there.
Again a perceptual bias, and psychological reason for chart reading failure. But, we now have the additional tool of Level2 and P&S.
IMO, seeing that broader view and then zeroing in on to the micro level of level 2 and T&S tells you if your suspicion of the likely ensuing action is really going to pan out or not.
However, my question would be, if you feel that chart reading is open to perceptual bias, why would Level2 be exempt?
As you presumably use Level2 on a fairly regular basis, I have seen other trades listed on these boards, where the subsequent price moved a much greater distance in your favour, yet you had already exited for $0.17, etc.
My point is of course that Level2 must have indicated to you an exit........but with hindsight, it was proven to be incorrect. Therefore, I would assert that Level2 is open to exactly the same perceptual bias that chart reading is prone to.
This same argument can be applied to Price and Volume analysis.
Technical Analysis as a whole, incorporating all the individual methodologies espoused still shows approximately a 50% expectancy. That is to say, it will either succeed, or fail. Historical patterns are just that historical, they are not predictive, therefore you can not attach a mathematic construct, probability, to the opportunities and expect them to play out as calculated.
There are always exceptions to every generalisation, and there is a trader on an alternate thread returning 700% in 2weeks, but on average, technical traders lose money for many reasons, but a substantial one is that already identified in this thread.
Cheers d998