About a month ago, we talked about some of the most successful chart patterns. Tonight, we will focus on some other successful chart patterns. The same rules apply as they do to the most successful patterns. The patterns have to be confirmed by a break in support or resistance. Remember the support or resistance does not have to be horizontal lines; a lot of times the support or resistance will be a diagonal line. The distance at the pattern’s widest point will give us the expected distance to move once the pattern is confirmed. The support or resistance point, once broken, is the starting point for the measuring of the expected distance. These patterns work the same as the most successful except the target point was reached less often.
The percentages provided here are based off of a 10 year study done by autochartist.com using the major pairs and some major cross pairs. The time periods covered were 15 minute, 30 minute, 1 hour, 4 hour, and day.
Here are the results for the next tier of patterns. The double top reached its target 75% of the time. The ascending and descending triangle patterns, and channel up and down patterns were reaching the target 74% of the time. The wedge, flag, and triangle patterns were 66-69% successful. The least successful pattern was the pennant pattern at 56%.
Use of the patterns alone is considerably better than a flip of the coin, but used with other analysis can make pattern use even better.
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