List Your Favorite Setups

[Soultrader]

Pattern Failure Setup:

This is a neat little setup that I use to take advantage of common technical analysis patterns. Alot of new traders will discover price patterns and think they have discovered the holy grail. This setup takes advantage of crowd misunderstanding.

For example, in a head-n-shoulders pattern new traders love shorting the break of the neckline or at the right shoulder. However, in a pattern failure setup I will place a buy stop right above the right shoulder. New traders love trading this pattern but they do not realize that the shorter the time frame, the less valid the pattern.

If I do get filled, prices usually rally because of the triggered stops that are placed by traders above the right shoulder and the head.

[1time]

Reversal Patterns:

I trade mainly reversals at fibonacci cluster levels. I have also noticed that 10am reversals take place often. I am still trying to revise this setup to build rules and guidelines for it.

	Quote:	soletrader
	Pattern Failure Setup: This is a neat little setup that I use to take advantage of common technical analysis patterns. Alot of new traders will discover price patterns and think they have discovered the holy grail. This setup takes advantage of crowd misunderstanding. For example, in a head-n-shoulders pattern new traders love shorting the break of the neckline or at the right shoulder. However, in a pattern failure setup I will place a buy stop right above the right shoulder. New traders love trading this pattern but they do not realize that the shorter the time frame, the less valid the pattern. If I do get filled, prices usually rally because of the triggered stops that are placed by traders above the right shoulder and the head.

I have also noticed that price patterns become less reliable on intraday trading. Any thoughts on this?

I use a combination of stochastics on 3 different time frames. I will take a 1min, 3min, and 5min stochastics. If all three have crossed the zero line and are above 20, this is my long signal. If all three have crossed the 80 line this is my short signal. This is mainly for a scalp of the S&P's.

[Lisa]

	Quote:	timbo
	I use a combination of stochastics on 3 different time frames. I will take a 1min, 3min, and 5min stochastics. If all three have crossed the zero line and are above 20, this is my long signal. If all three have crossed the 80 line this is my short signal. This is mainly for a scalp of the S&P's.

Interesting... I'm going to test this out.