Been backtesting different patterns for months now and getting mixed results.
Head and shoulders seems decent but double tops keep faking me out. Triangle breakouts work sometimes but not consistently enough.
What patterns actually hold up for you guys in live trading?
Bull flags work great for me too. Love simple ascending triangles - just wait for volume to spike on the breakout.
Double tops are tough since they’re so obvious to everyone.
Wedges work best for me. They’re slow to develop but once you get a clean breakout, the follow-through is usually solid.
I don’t trade head and shoulders anymore. They’re too obvious - everyone spots them, so the market just screws over most traders.
Biggest lesson I’ve learned: size down on pattern trades. Good setups still fail 40% of the time, so you need room for multiple tries.
Flag patterns are my go-to. Just a simple rectangle after a strong move, then it continues the same way. Volume has to confirm the breakout though. Don’t bother with complex patterns - most people overthink it. A basic support/resistance break with decent volume beats any fancy setup. Stick to testing on specific pairs. EUR/USD acts nothing like GBP/JPY. What works on one will probably bomb on the other.
Pennants work great for me. They’re like flags but the consolidation angles against the trend instead of going sideways.
Biggest lesson I learned: wait for at least 3 touches on each side before the breakout. Too many people jump in after 2 points and get wrecked.
Rectangles are seriously underrated. Not as sexy as head and shoulders, but they work way more often. I track everything - rectangles hit around 65% while head and shoulders barely breaks 50%.
Here’s what changed my pattern trading: I only take setups that take 2-3 weeks minimum to form. Those quick patterns that develop in a few days? They usually fail. The market needs time to build real support and resistance.