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chart patterns versus behavioral patterns

  • 5 days ago
  • 1 min read

many successful traders are facing the fact that basic foundations of their trading systems are broken and their technical edges have seized to exist. AI applications and supercomputers have now not just exploited arbitrate trading but typical chart pattern trading has no significant edge anymore. This includes Indicator trading as well where the probabilities are simply not significant enough any longer to build executable systems. This forces the individual trader to expand their horizon, accept the fact of a complete overhaul of their systems and forces the need to think outside the box. Creativity in edge creation is again challenged and cyclical and time component trading comes to the forefront. One such edge undervalued is also short term behavioral patterns, which should not be mistaken with typical chart pattern applications. here an example:

while a pattern day trader might be interpreting the strong bullish candles as reversals and find evidence for a bullish dominance, the behavioral pattern trader in conjunction with stacking odds of additional tools identifies the edge of near 90% retrancement following these short term bullish attempts markets are a reflection of their time successful traders adopt to change in an anticipatory fashion

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