Another pattern Im trying to find a practical example of is - Flat Base Pattern... it looks to me like GDF is setting its self up for a possible break up which would be confimed by an increase of volume as it breaks?? am I on the right track here? That aside we should hear a little more about the sale of the whole group which Im hoping is along the lines of the figure mentioned in the papers of R10bn. Hence Im stocked up and holding thumbs.
TZ, my 5c on patterns is that they are mostly a waste of time. Research into patterns found that only two really worked; Dow Thoery and head and shoulders with the former the better. Everything else was at best dodgy.
bukowlski begs to differ Simon. see my post "Your book for the day!". he observed over 700 stocks over a period of 10 years, and catalogued their results, showing a kind of statistic result indicating relative performance of different patterns. certain ones definetly proved unprofitable but some are good. patterns are probably impossible to prove mathematically, but an analysis like his provides invaluable insight imo.
ya, I have seen lots of reserach on patterns. But the question is always actually trading them in real life, and that's when they often fall down due to spreads, costs, entry points etc. My personal experience is that they are not worth the effort and one is better finding a few that really work and that are really simple (in terms of entry/exit) - and then sticking with them. Further, to my mind the real problem is identifying them. It relies on the human eye that is seriously under emotional pressure and hence we see what doesn't really exist, or see what we think we see - but it isn't.
just like another less famous TA guru with a degree in maths he made more money from selling his pearls of wisdom rather than using them to trade with....trading is not about maths....if you think it is and you are trading lets hope your mother in law is as generous when you need to be bailed out....
i dont have the original book only the discussion on charts in the book at hand. so i may be wrong, but i think he (bulkowski) was looking at it from an academic perspective, due to the continual debate around whether TA actually holds merit, versus proponents of the efficient market. the author of the book does make it clear that the value of Bulkowski's study is not in determining the value of chart pattern analysis itself, but in determining which of the classic patterns are more profitable at least risk. and not everyone is interested in money bro, some people derive their life satisfaction from research and academia, as hard as that may be for members of the forum to understand. it is better to have some form of study that one can point to and accept or reject than to trade on pure Nth hand anecdotal evidence (of the viability of charts).
chartist, i would disagree. it is fundamentally about maths or more specifically statistics. BUT where I agree with you is it is way more than that. the stats just swings the balance of probabilities in your favour (else you wouldnt have an edge) but the "skill" or art is in managing your own fears, greed, psychological weakness, and so on. discipline is where it stands or falls. but i suspect that is what you are trying to say anyhow? since you dont need to be good at stats to be a good TA, or being good at stats def doesnt mean you'll be a good TA. just my 2 cent understanding of it all... :)