chart pattern

Chart pattern was initially discovered from traders hand drawing thousands and thousands of charts. I remember 25 years ago, I was working in a brokerage house as a chartist in forex trading, my only job is to follow the price movement and write "O" or "X" onto the big board on the wall. That is actually the point and figure chart.

Until 7 - 10 years ago I still hand draw my charts, but only for those stocks trading that are in my trading portfolio. Everyday I would draw the "end of the day" open-high-low-close bar on the daily charts.

The reason is that while hand drawing daily bars, it gave me a good feel of the actual price movement of the day, so let me understand a lot better of how and what traders have gone through in their mind during the day trading section.

And now...you probably would say the technology could have replaced the hand drawing charts. Wrong! I still hand draw and follow some major indices, or underlying index of the stock that I am trading. The major market I follow and traded most is S&P 500. You would be surprised how many times I spot trading set ups while hand drawing bars.

Most Chart Patterns are traps, especially in currency market, you will lose money more time than win if you follow those patterns. If you have time do a research in chart patterns like "head and shoulders", "double top", double bottom", ascending triangles", descending triangles", "flags" and "pennants" and many more...

The chart patterns that I use in Stocks, Futures and Commodities are: Spike, Island Reversal, base pattern for a long time or topping for a long time, triple top or bottom, gaps and some other patterns.

Mind you! There are lots of time I wouldn't trade with just a pattern or a pattern that has not confirm well or a chart pattern looks like a trap. I would present with image and explain more in this site when I got time.

How to spot chart pattern set-up?

Reading and hand drawing charts day in and day out, are the best ways to learn to spot a chart pattern trade set up. I understand we have powerful computers, but occasional hand charting the daily closes, highs and lows, and the details of a few days trade, would keep you in touch with the daily bull and bear fight, and the traders' emotional fluctuation.

We are lucky enough to have all the information from the past traders who have already show us many tradable patterns, some even come with the probabilities of success. We first learn all the information regarding a specific pattern then trying to match them in a chart, hopefully a similar pattern will form sooner or later to give us a gift.

The new technology of "nero": computer actually learn to read charts and alert you when tradable patterns were found...wow, I am looking into this ...perhaps we could explore this further in the the coming forum.

Searching for those chart patterns work to help day trading stock pick, analysis of different chart patterns in the commodity futures market. The stock trading system make trading chart pattern simple.

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