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Joined: 4/18/2005
Posts: 4,090
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Aspll in a past poast you mentioned that you "just love triangles". I'm now getting more familiar with them. How reliable do you find them ? are certain types mroe reliable to you than others? As I remember from reading Edwards and Mcgee's "technical analysis of stock trends" they tend to be "continuation" patterns... but there are ocasions where they can fomr a bottom....but that is less reliable than the continuation. Acending triangles, and flat topped triangles are easy enough to follow logically. However I haven't had allot of experience with right triangles... and the smaller pennants.
I have been watching several pennants in intra day charts and they seem to more or less be continuation patterns.
do yo deal with Flags often? I find that by the time I recognize a flag it is past tense.
just curious for your thoughts.
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Registered User
Joined: 9/22/2005
Posts: 849
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I also love those triangles and have had some success with them.
I am probably going to tell you some things you already know. but this is how I think and talk. If I do, I ask your forgiveness beforehand.
In the first place, triangles are classed as continuation patterns, which means that after the breakout the trend will continue in the direction it was going before the triangle developed.
For our purposes a triangle is formed by two lines, one connecting two or more highs and one connecting two or more lows. The highs and lows should alternate, hi lo hi lo, or lo hi lo hi. If the two lines converge so that they cross at some time in the future, then they form a triangle. (I told you I would tell you some things you already know.)
There are two types of triangles to consider, right triangles and symmetrical triangles.
A right triangle is one in which either the top or the bottom line is flat and the other side converges toward it. If top of the triangle (formed by two or more highs which are the same or nearly the sane) is flat then it is ascending, Conversely, if the bottom is flat (formed by two or more lows which are the same or nearly the sane) then it is descending.
Any triangle which is not a right triangle is a symmetrical triangle. Unlike in geometry where a symmetrical triangle has two sides of equal length, for our purpose a symmetrical triangle has no flat sides and the top slopes down and the bottom slopes up.
In order to be relatively safe you should wait until the price has closed above the top of the triangle before entering a trade, because it will break down a significant part of the time. There should also be a significant increase in volume either on the breakout day or shortly before.
You can estimate where the price might rise to by taking the difference between the top line and the bottom line at the beginning of the triangle and adding it to the breakout price.
As usual, you should have confirmation by other indicators.
Thomas N. Bulkowski has an excellent discussion of triangles in his book “Getting Started In Chart Patterns”
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Bcraig is the resident expert on Triangles. He has been kind enough to share his findings with me, that has led to great profits..
My favorite triangle pattern is the ascending from a bottom triangle.. They seem to break to the upside with more regularity then the pennent or flag patterns that you find during a resting or consolidation pattern..
I tend to exit them quickly, missing the entire run. (I do not want to give the market makers a chance to mess with my head). I buy a lot of shares so that I will have a good profit even though I exit early..
I am like a vulture in my tactics with certain patterns, I will fly in and grab a quick piece of meat and then fly away. There are other patterns that take longer to develop and I play them with more patience, buying shares here and a little more there..
The best advice I can give to every one is study charts and their patterns, become obsessed with them..
I play chess avidly so I have developed a flare for spatial relations, I see repeating patterns in the charts and the candlesticks.. You almost get to know the tricks that the market makers use to take your money. Take SUAI for instance see the tall white candlestick from 2/05/07 Now someone will say I want that stock, so the next morning they will buy at market and watch in disapointment over the next two days as the price is going down, and now today they will sell for a loss right at the opening bell.. And by days end the price will start back up again. (I am not say that this will happen that way) But I have seen it a million times. That is when you start to have success in trading, when you start to feel the rhythm of the chart paterns, But be aware because everything can change on you in a heartbeat...
Enough preaching for now.. This is just the way I view the markets. Of course nothing I have said should be taken as factual. You will develop your own way of viewing things.
Goodluck to you..
Apsll..
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Registered User
Joined: 12/8/2004
Posts: 1,301
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All I can say is ASCENDING triangles consistently make you money. I've been trading futures recently and their upside predictabilty is uncanny.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Come on now HNC be nice.. Just look to SIR, IVAN, EVOL, GV.
I am not saying that all triangles are a garantee, I am only saying that Myself and Bcraig have had some recent success...
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Registered User
Joined: 3/21/2006
Posts: 4,308
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FPP: Is a triangle that I think is failing.. It is starting to stradle the bottom trendline.. Some might say it has breached it...
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Registered User
Joined: 4/18/2005
Posts: 4,090
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FPP loosely reminds me of ATI in the 3rd quarterof 06. I was watchign that tringle develop and when I thought it was going to break donw it broke up.. I entered and "flew away" with my nice bit of meat .... that turned out to be a tid bit. In that case ATI looked to me to be a more or lessdecending flatt bottomed triangle... It broke up with such energy that that made me sit up and realize that I need to study triangles more.
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Registered User
Joined: 9/22/2005
Posts: 849
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HaveNoCents is correct.
Ascending triangles will make you money, They break out to the up side 70% of the time then throw back to the top of the triangle 54% of the time before cuntinueing up. (Bulkowski)
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Registered User
Joined: 9/22/2005
Posts: 849
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Any triangle will make you money if you are careful.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I must apologize to HNC, I thought he was being sarcastic..
And you are correct BC if the triangle breaks to the down-side then you can always go short on the stock..
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Registered User
Joined: 9/22/2005
Posts: 849
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I think you are right, apsll. FPP has gone past the apex of the triangle and thus the triangle is no longer operative.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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BC: I did not know that you have been posting on this forum for so long????
I ran across and old thread from last march, with you and HNC discussing penny stocks.. Why didn't you tell me that you were an old veteran of this forum...
I know that you have been a gold member since 9/22/05 but I never saw a post from you when I started a while back...
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Registered User
Joined: 9/22/2005
Posts: 849
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Registered User
Joined: 9/22/2005
Posts: 849
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I had been in the market in the eighties and the day before the big drop I had a pretty good paper profit. I went on vacation and my after the market closed the day of the drop my broker called me with the news. I panicked and sold every thing at a big loss. If I had TC2000 then and known what I know now I like to think I would have sold on the indications that were there and would have been sitting on a fat cash position. Ah well, hind sight is 20/20. I have stayed out of the active market since.
In ’05 I learned about TC2000 while surfing the internet and joined as a paper trader, I began lurking in the forum, listening to the comments, and learning some of techniques from HaveNoCents and others, and sticking in a really non substantive comment now and then.
With some health and other problems I discontinued my subscription to TC, reinstating it in early ’06.
Since then from HaveNoCents, Diceman, apsll, and others I have learned the necessity for proper money management and the wisdom of never raising a stop.
I have set up a spread sheet to take care of profit, stops, and some other things I like to keep track of and to trigger a sell when a stop has been violated. Between this spread sheet and TC I evaluate the need to sell and to raise a stop, (You guys have slapped my hand too many times for considering lowering a stop.)
Remember these are all paper trades.
From 09/23/05 to 11/10/06 I completed 60 trades with 23 wins and 37 losses for a net loss of 1.4%. Since 01/04/06 I have completed 13 trades with 9 wins and 5 losses for a net profit of 14%, On one of these trades I followed Diceman’s suggestion and let the profit run and followed it up with tight stops one cent below the previous day’s low. I got nervous at Thursday’s close and sold it for a 55% profit. It dropped 22 cents on Friday.
This improvement I attribute to my having taken to heart the things you have been saying.
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