Tag Archives: chart patterns

A Brief Note On Chart Patterns With An Example Of Recent Failure

A recent failure of an island reversal pattern in the chart of the 10-Year Note yield adds to a long list of failed chart patterns in the last few years and reinforces claims that they are random formations. In the … Continue reading

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Visual Chart Trading Models Require Ecorithms

Even some academic researchers have fallen into the trap of trying to quantify the performance of patterns used by visual chart traders, such as for example triangles, head and shoulders, support and resistance and trendlines. Quantification of such patterns requires … Continue reading

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Technical Analysis Has Contributed To A Massive Wealth Redistribution

Classical technical analysis has contributed to the largest non-violent wealth-redistribution in the history of mankind. Modern technical analysis is not doing any better.

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Short Squeeze After a Failed Massive Double Top in Utilities ETF

Hopes of a double top in XLU were shuttered yesterday after a violent squeeze that took ambitious shorts by surprise. A gain of 2.27% in just one day should be enough to convince all chart traders that obvious formations fail more often … Continue reading

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Chart Patterns Without Statistics is Naive Technical Analysis

I am saying the obvious but I know some will deny it: Anyone who makes bets in a game of chance without having a measure of the expectation is a naive gambler. This is what many traders do when they … Continue reading

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Bond Charts Have Become the Junkyard of Chart Patterns

Bonds, and especially TLT, the popular ETF, have become a junkyard of classical chart patterns, a place where wrecking of such dubious formations is frequent and unforgiving.

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Gold False Breakout to the Downside

Spot gold has gained more than $45 after testing longer-term resistance near $1,540 last week. Some technical analysts have recently focused on some, in my view, random pattern formations on the gold chart and have pointed to an imminent collapse. Recent … Continue reading

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The Main Cause of Failure of Some Popular Technical Trading Methods

Trend-following based on indicators and classical chart patterns are two trading methods that were developed in mid 20th century using data from the equity markets mainly. These methods worked well for an extended period of time in those markets due to the presence of autocorrelation. After … Continue reading

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