Loading ...Inverse Head and Shoulders
Tommy…I looked at your link .
I don’t know how this outfit calculated these Pattern % successes
I don’t know who this outfit is BUT
Clearly their percentages are Nuts !!
IF These patterns were all over 90% success rate ..trading would be easy and we would all be billionaires
Inverse head and Shoulders do NOT work out 98% of the time…this is NUTS !!
Just look at random charts for a lengthy period of time and see when the chart is in bearish mode how many INHS FAIL Miserably !
The first chart I pulled up is ABX weekly as I have been following it
So this is just a random chart …LOOK
Basically it looks like they failed 80% of the time during the bear phase !
NO PATTERN COMES CLOSE TO BEING 98% !
THE MOST YOU CAN REASONABLY HOPE FOR WOULD BE 70% OR SO !
“He uses statistics as a drunken man uses lamp-posts… for support rather than illumination.”
Andrew Lang (1844-1912)
LOL…I like it !
Avi…do you have any bag of tricks for trading that are 98% successful ?
I WISH!!!! People that track us estimate us around 70-75%. This is a game of probabilities, not certainties.
Head & Shoulders is an American brand of anti-dandruff and non-dandruff shampoo produced by parent company Procter & Gamble.
Come to think of it . . . there is something that has a 98% certainty . . if you follow certain “analysts” we know, you have a 98% certainty of blowing up your account!! 🙂
The 98% supposedly applies to an “upward exit”. I’m not exactly sure what that means…they clearly say 74% of the time the pattern target is achieved (consistent with Bulkowski) so 98% refers to something else. I suspect it means that when the pattern breaks out and you buy the backtest, 98% of the time there will be upward movement from the backtest neckline before lower prices occur below the neckline. I would probably believe that but the bounce could be a only penny and still fit the statistic. If this is true it would still be tough to trade profitably because most would place their stop on a move below the neckline, so they may get an initial tiny bounce only to get stopped out. A trailing stop may give you such small profits that the juice would be hardly worth the squeeze.
No doubt about it, these are good patterns but I think you need to dig a little deeper to understand the basis of the 98% success statistic.
If instead of using the neckline as the point of reference for profitability, you used the right shoulder, it would easily approach 98%
Absolutely NOT
You are saying that every time there is a right shoulder on a chart there is a 98% chance of it breaking out ?
almost half of these POTENTIAL Hanad S patterns never even manifest
IF they do break out there is some good % (Not 98) of them fulfilling
Yes, I am saying exactly that.
Why do you think I am always looking for right shoulders?
See my post above.
All a right shoulder is, is a higher low.
last time I checked, a higher low is bullish.
Sure it is nut NOT a 98% certainty the trend continues…some higher lows are followed by a lower low
give this up Tommy….I won’t sit by and let novices come in hear an believe they can make a killing on a INHS every time.
I believe you yourself are new to this as well…do it long enough and you too will find out 98% 88% even 78% do NOT exist in this game