Long time back I had read - " failed double top buy signal and failed double bottom sell signal- if you just trade this signal I promise ,you will be profitable. This seems to be true many times. Has anyone more experience about these failed signals? Thanks
could you clarify? Do you want knowledge on the detection approach for the four items??? 1. Passing double top 2. failing double top 3. Passing double bottom 4. failing double bottom Please put up graphics so we better know where you operate.
1) It "works" some of the time, not ALL of the time. 2) What will you do if the trade turns into a loss and keeps getting "worse"? :eek:
It takes a great more into consideration than to do that as I have tested this over one and five minute bars in ES and Gold and it tests out to lose. I have found by waiting for ave swing length of instruments traded must be near and distance between pivots to become smaller to as to have effect of starting a "rounding top/bottom" then getting a "Double" for a Counter-trend trade to be much higher degree of profitable trade. A "double" or what I like waiting for on counter trend trades, "Secondary" where price attempts to make new highs/lows fails and breakout of this pattern provides smaller risk and better chance of profitability. I have found failed "Doubles" work best in continuation of a trend and much more in uptrends as these patterns often show a congestion, whereas in down trend they are more swift and less likely to form congestion to form doubles. Es being a congestive instrument often has the "Run the stops" in the afternoon to screw the inexperienced trader and take out the high/low of the day by few ticks only to reverse hard, especially on Fridays as many day and swing traders want out on end of the week. Much easier money when it on floor to sweep up. Es is one of THE most redundant instruments to trade as it used mainly as a hedging tool. Watch anything long enough tick by tick and recording stats, you can discover much.
Nothing works all the time. Not the failure of a good signal, not the failure of the failure, not even the failure of the failure of the failure.
Are you saying the 2nd test of a high or low is the "double" or are you saying that there have ALREADY been two tests of a high or low and the THIRD time is the time that the market will bust through (up or down)?
The answers lie in Danto's (Columbia) symmetry of history theorem. the setting for maintaining success is determined BEFORE the signals mentioned arrive. Of the four types of trends, only one type has bearing on this puzzle. The gold chart data posted shows the data contrast nicely. Had is been analyzed from the trend type point of view, then "all of the time" type rules would emerge. As could be seen, this type of circumstance only occurs in drift type trends. So the logical expression being tested first is: Is the trend a drift trend? The answer must be true. Then on the second and third level of consideration, the tests are as follows. 1. Test for trend termination based on trading safety. 2. Test for trend termination based upon drift trend completion or extension. Ultimately, the trader throws away the consideration of the minutia of "min-patterns" in favor of doing sysyemic monitoring and analysis.