Hooya
Sceptical maybe, wary yes. There is no particular reason for my attitude, the fact that I do trade indicates that I am not anti or totally sceptical of the trading world, if I was I would not be visiting this site.
I am bemused by the number of systems in use and by the apparent confidence that is attributed to their effacy.
Taking a simplistic view or should I say a KISS view, the price does not know that it is forming a wolfwave, cup and saucer or any other man invented formation, it moves because people are buying and selling. The man made formations come into play by chance or when enough people beleive them and act on them to complete a self fulfilling prophecy. If the formations were more than chance or people perception they would hold good all the time ie. a scientific fact or at least occur the greater % of occasions.
Probably getting too far away from what this thread is about
Regards
bracke
Sceptical maybe, wary yes. There is no particular reason for my attitude, the fact that I do trade indicates that I am not anti or totally sceptical of the trading world, if I was I would not be visiting this site.
I am bemused by the number of systems in use and by the apparent confidence that is attributed to their effacy.
Taking a simplistic view or should I say a KISS view, the price does not know that it is forming a wolfwave, cup and saucer or any other man invented formation, it moves because people are buying and selling. The man made formations come into play by chance or when enough people beleive them and act on them to complete a self fulfilling prophecy. If the formations were more than chance or people perception they would hold good all the time ie. a scientific fact or at least occur the greater % of occasions.
Probably getting too far away from what this thread is about
Regards
bracke
I wouldnt think too much about self fullfilling propehcy...the fact is that as price moves so does it 's relation to trendlines, chart patterns etc. A head and shoulders pattern doesnt work because enough people trade it ; it works becuase more often than not a particular outcome when the price makes that pattern. Basically all chart patterns are just a differrent graphical diaplay of price (which in turn is a representaion of pyshcology) nothing more and nothing less.
Hooya
"the price makes that pattern"
The question is why does it make the pattern.
Is it pure chance, man induced, or physics, and probably more to the point does it point the way to the future price.
I accept that patterns are a graphical display of price and that we can attribute all forms of patterns to the price movement. My query relates to the reliance that is placed on them as a guide to the future price movement.
Regards
bracke
"the price makes that pattern"
The question is why does it make the pattern.
Is it pure chance, man induced, or physics, and probably more to the point does it point the way to the future price.
I accept that patterns are a graphical display of price and that we can attribute all forms of patterns to the price movement. My query relates to the reliance that is placed on them as a guide to the future price movement.
Regards
bracke
The question is why does it make the pattern......just forms out of natural psychological raction to price movement..
"My query relates to the reliance that is placed on them as a guide to the future price " they are as relyable as just watching price
"My query relates to the reliance that is placed on them as a guide to the future price " they are as relyable as just watching price
Hooya & Finirama
In an attempt to summarise, are you both saying that as a result of supply and demand the price forms a given pattern which gives an indication to the future price movement?
If so has anyone ever undertaken comprehensive research on the % accuracy of all named patterns as a guide to the future price?
Bearing in mind that the price is continually subject to supply and demand, is it continually forming a new pattern. In other words the price movement is a continual succession of patterns with advocates each seeing their espoused pattern in the price movement. Thus there may be several patterns put forward for a particular price movement at which point you pays your money and takes your choice?
Regards
bracke
In an attempt to summarise, are you both saying that as a result of supply and demand the price forms a given pattern which gives an indication to the future price movement?
If so has anyone ever undertaken comprehensive research on the % accuracy of all named patterns as a guide to the future price?
Bearing in mind that the price is continually subject to supply and demand, is it continually forming a new pattern. In other words the price movement is a continual succession of patterns with advocates each seeing their espoused pattern in the price movement. Thus there may be several patterns put forward for a particular price movement at which point you pays your money and takes your choice?
Regards
bracke
"a given pattern which gives an indication to the future price movement?"...Yes
"If so has anyone ever undertaken comprehensive research on the % accuracy of all named patterns as a guide to the future price?"
doubt it but patterns or ink blots as Bonsai likes to call them are open to interpretation. eg: my pattern could have been an head and shoulders to someone else.
Have ot remember that the markets are a complex system and trying to get absolute definition out them is probably impossible.
"If so has anyone ever undertaken comprehensive research on the % accuracy of all named patterns as a guide to the future price?"
doubt it but patterns or ink blots as Bonsai likes to call them are open to interpretation. eg: my pattern could have been an head and shoulders to someone else.
Have ot remember that the markets are a complex system and trying to get absolute definition out them is probably impossible.
Good call Hooya,
Closed the rest after the first bounce..now flat.
Bracke,
Definetly.
Check out 'Encyclopedia of Chart Patterns' by Bulkowski.
Its the most comprehensive guide i've read and gives a breakdown of different patterns along with identification guidelines/forecasting methods as well as stats like failure rates, % breakouts, most likely rise/decline etc.
There is no point trading patterns unless you know wot the likely outcome is going be as this will determine the risk/reward ratio and whether its worthwhile taking.
Closed the rest after the first bounce..now flat.
Bracke,
Definetly.
Check out 'Encyclopedia of Chart Patterns' by Bulkowski.
Its the most comprehensive guide i've read and gives a breakdown of different patterns along with identification guidelines/forecasting methods as well as stats like failure rates, % breakouts, most likely rise/decline etc.
There is no point trading patterns unless you know wot the likely outcome is going be as this will determine the risk/reward ratio and whether its worthwhile taking.
