Tag Archive for: Year in Review

• A study on Chart Pattern Reliability with the available sample data over the past year.
• H&S continuation has been the most reliable chart pattern over the past year. Rectangle continued to be in the top 3 reliable chart patterns.
• Detailed statistics on different types of breakouts.
• The impact of different market cycles on chart pattern opportunities.
• Live Q&A

1. Do you always use Log scale? Or, in some cases, use regular? 42:40
2. So, if you want to be aggressive in looking for Type 1 & Type 2 breakout, you have a stop width of 3% (confirmation level minus pattern boundary), right? 43:26
3. Would you recommend going long at the lower support level of a rectangular pattern (assuming we are in a bull market) to capture first the move to the resistance level and then the breakout? 44:47 (Rectangle - Trading Range-Bound Price Action & Candlestick Patterns at Support and Resistance)  
4. Given the large monthly pattern, how would you set trailing stops for $GOLD / $SILVER? 46:11 (ATR Trailing Stop-Loss - H&S Top) 
5. Is Type 3 based on closing price or intraday? 47:15
6. Do you ever use price-relative charts for equities? If not, why? 48:13
7. How do you manage entries during the earning season? Do you skip patterns when earnings are in the next x days? 48:47
8. Can the success rate of cart pattern breakouts be improved by incorporating volume? 49:13
9. When calculating ATR Trailing Stop Loss, how many periods do you use to calculate the ATR? 51:27
10. Do you ever add to a trade when you realize it is Type 1? 52:39
11. How much leeway can you give when drawing the horizontal boundary? You don't negate the pattern if it goes slightly over the boundary or slightly below the lower boundary. Is it subjective, or is it a specific rule? 53:12

• A study on Chart Pattern Reliability with the available sample data over the past year.
• H&S continuation has been the most reliable chart pattern over the past year. Rectangle continued to be in the top 3 reliable chart patterns.
• Detailed statistics on different types of breakouts.
• The impact of different market cycles on chart pattern opportunities.
• Live Q&A

1. Last year, you said 2022 was the most difficult period for breakout trading of the last six years. Many breakout traders implement "sit out" periods where they stop trading in adverse market environments. Others use Progressive Exposure to size up or size down based on how well breakouts are performing. Do you use either of these tactics? 46:42
2. On type 3 breakouts, are you getting stopped out and then reentering? 48:19
3. It seems like some of your setups are based on the profit target and where your stop or pattern negation level are placed, that your risk-reward ratio is less than 1. Can you clarify some of those charts and if you're taking these trades or if you're charting what you see on the chart? 49:02
4. Do you use a trailing stop once price action has moved toward your price target favorably to avoid a loss on something that has moved so much in the favorable direction 50:04
5. Where are you placing your stops on the chart patterns you use? Like Head and shoulders, rectangles, Cup and handles, triangles, etc? 50:50
6. What are your thoughts on the current formation of the Gold futures chart? I see a confirmed double top on the daily, but the pattern is small. Would you think it's too small of a pattern to trade? Thoughts on the position of gold's price? 51:52

• ATR Trailing Stop-Loss - H&S Top
• Stop-limit order and early entry
• Breakout with a pullback - Application of ATR trailing stop-loss

• A study on Chart Pattern Reliability with the available sample data over the past year.
• Rectangle has been a reliable chart pattern with the H&S variations. Examples and studies on those reliable patterns.
• Detailed statistics on different types of breakouts.
• The impact of different market cycles on chart pattern opportunities.
• Live Q&A

1. SLIDE 5 - I only look for patterns that begin with a pivot point countering the preceding trend. However, I see on slide 5 that you've labeled the pattern beginning with two lower pivots after an uptrend. Am I being too rigid in defining my patterns? 50:55
2. SLIDE 8 - In a Type 4 breakout, if the price reverses down and the negation level is hit, but the price then rebounds/recovers and breaks out again, why is the chart pattern destroyed? 52:20
3. How is the breakout confirmation price calculated? 54:21 (Technical Analysis of Stock Trends, 5th Edition, Edwards and Magee) 
4. In Peter Brandt's book "Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading," he described the average duration of some classic patterns; my question is: do you have your own durations for classic chart patterns, or is the average duration universal to all classic chart patterns? 55:35 (Diary of a Professional Commodity Trader, Peter L. Brandt) 
5. Do you take profits once a chart reaches its target, or do you let the trade run until you see signs of reversals? 56:35
6. How many concurrent positions do you recommend a breakout trader hold? I'm reading the Mark Minervini books from your reading list, and he recommends holding no more than 4 positions (non-margined) to 8 positions (fully margined). Do you recommend similarly? 57:40
7. I just want to make sure I understand that 1. the success rate is calculated from subjectively identified inside pattern minor price points? and hence 2. the success rate showed here has nothing to do with my trading success rate because everyone's stop level can be different? so 3. if that's the case, what's the point of calculating the success rate here unless we all use that minor point inside the pattern as a stop level? 59:03

• A study on Chart Pattern Reliability with the available sample data over the past year.
• Rectangle has been a reliable chart pattern with the H&S variations. Examples and studies on those reliable patterns.
• Detailed statistics on different types of breakouts.
• The impact of different market cycles on chart pattern opportunities.
• Live Q&A

1. Are there certain stocks (MSFT, GOOGL, etc.) that have a greater likelihood for Rectangles? 58:47
2. When do you enter into position on breakout day? Near closing time at market price or enter into position as soon as breakout occurs during the day? 59:39 
3. Do you consider volume or any other similar confirmation indicator on breakout day? 1:00:36
4. If you see the momentum is getting weaker, do you have any exit strategy before stop-loss is triggered, or you only exit when SL is triggered, or target is achieved? 1:00:52 
5. Do you have any pyramiding strategy when entering into position, or you enter full position on breakout day/level? 1:02:07
6. Do you still buy/sell 3% from the boundary? Stop-loss on the boundary? 1:02:28
7. What do you think about using of Fibonacci and also the using of it for reentry during long position in the type 3 and 4 breakout. 1:03:08
8. Do you take profits when reaching target? Some stocks seem to keep running and that means giving up extra profits. 1:03:59
9. Is the reentry point usually at the same level as the original breakout? 1:04:30
10. Would you consider a set up in PEP as a possible two patterns 1) Rectangle and 2) cup and handle as well is FDX both H/S and cup and handle. 1:05:21
11. What order types do you prefer? 1:05:51
12. What risk/reward level you see most successful? 1:06:14
13. On inverse H&S, I guess on H&S as well, your pattern negating level is sometimes too big to use as a stop loss, won't a stop loss just below the 200MA work better? 1:06:45 
14. What was the gain-loss ratio during last year of your strategy? 1:07:18 
15. Does it concern you to place a stop order. I have heard that the market makers will try and hit your stops. 1:07:58
16. During a parabolic advance, the break of the parabola could mean an 80% correction. How do you draw the parabolas? Do you think BTC and ETH have broken their parabolas? 1:08:34
17. Can Cup and Handle formation act as continuations, upward reversals or both? 1:09:08
18. Do you care about the number of stock shares number and check the same fundamentals data? 1:09:42 

Tech Charts Year in Review – Year Three

• A study on Chart Pattern Reliability with the available sample data over the past year
• Chart patterns with horizontal boundaries have been more reliable compared with breakouts from chart patterns with diagonal boundaries
• Long-term trends impact the number of bullish and bearish chart pattern setups and breakout opportunities
• H&S tops, H&S bottoms and descending triangles have been reliable with breakouts from well-defined horizontal boundaries
• Developing breakout opportunities
• Live Q&A

1. When analyzing charts for possible trading opportunities, do you use good liquidity in the market as a trade filter, and what method do you use to determine good liquidity? 1:00:17
2. It will be nice if the performance of chart alerts can be tracked in an excel sheet. 1:01:42
3. How often do you trade personally? Did you trade all of the patterns summarized in the "Phases of market trends" slide? 1:02:19
4. I understand you don't like to use volume, however in technical-analysis-and-stock-market, Richard talks a lot about high volume on upward breakouts, can you explain why you don't use this at least for breakouts? 1:03:15 (LINK: VOLUME AS A CONFIRMING INDICATOR)
5. Can you talk about how you place stop losses after entering a position? 1:05:58 (LINKS: Breakout with a pullback – Application of ATR trailing stop-loss and ATR Trailing Stop-Loss – H&S Top)
6. Do you ever look at charts adjusting for dividends? 1:06:32
7. The statistics on page 7 - does Aksel include failure signals? Such as H&S failure, cup & handle failure, or even asc. des. triangle failures (breaking out of the diagonal line)? 1:07:11 (LINK: Head and Shoulders Top – Failure)
8. Why do you ignore wedges? You mentioned this on slide 7; I just wanted to understand your reasons. 1:08:12 (LINK: DIAGONAL BOUNDARIES ARE LESS RELIABLE)
9. Slide 9 - Can you repeat your MAs for weekly and daily timeframes? 1:10:22
10. Slide 8 - Can you explain how you set your 'pattern failure' level? 1:10:35
11. Your charts are mostly weekly - does it mean you disregard shorter timeframe formations? If yes, why? 1:11:35
12. Your H&S examples are all with horizontal shoulders - what is your view of inclined H&S? 1:12:18
13. Is it true some stocks follow classical patterns better than others over a long period of time? Hence if we find those names, we should follow them long term even if a chart finished this target/negation? 1:13:06
14. It would be extremely useful to add to the statistics the average ratio between target and negation levels with respect to the breakout level (sort of profit/loss), per pattern type. 1:14:19
15. Have you ever used a pullback strategy? It seems quite popular for some traders, what % of traders do you think are doing this? 1:14:34
16. Do you recommend using different stop strategy in terms of the pattern length? i.e., weekly ATR stop if pattern > 12 month, daily ATR stop if the pattern is 4 - 26 weeks. 1:15:24
17. Page 20, the symm. triangle, do you usually place negation level at the apex of the triangle because E&M book suggests that's a strong support? 1:16:26
18. Could you show us a breakdown of BreakOut success/failure statistics by Exchanges (or Countries, currencies)? It is relevant to those who do not trade signals in all exchanges/countries. 1:16:51
19. Are there national markets that demonstrate less emphasis on chart patterns? i.e., heavier % of "fundamental investors"? 1:17:25
20. Sometimes, you do not plot the 200MA, is there any particular reason? Besides 200d MA, do you use any other MA? 1:18:19
21. Are you ever concerned with how extended the minor advance is in a stock prior to the breakout? FDN for example bounced straight from the lower boundary; do we have to be careful of profit-taking? 1:18:53
22. How do you identify the price for horizontal and diagonal boundaries? 1:19:37
23. I loved to see the slide of statistics - are there more studies available on the website? (Maybe also compared to different observed timeframes?) 1:19:58
24. How do you treat spindles crossing the chart boundary during the weekly or daily chart development? Do you use a lower time frame to negate the false breakouts? 1:20:23
25. In terms of timing, what is the time horizon you usually see breakouts playing out? 1:20:58
26. How do you balance the initial stop loss positioning between chart pattern boundary and chart negation point to balance the position sizing and the risk as basis points in relation to the market volatility? 1:21:40
27. Between log scale and linear scale, which one is better? 1:22:14
28. For double tops-bottoms or H&Ss, is there a limit on the percentage (such as 3%) between highs and lows on double tops-bottoms or between right and left shoulders? 1:23:17