Jazz bro. You need to say that these particular rules are the ones that are used in DCAST. They resemble the rules of advanced formations of Tradeempowered but they are slightly different. By the way, I have created a free educational resource where I have collected ALL the rules of both: advanced formations and harmonic patterns. I also added described the most comonly used variations of these pattern. Click on the diagram an you will get an excessive description of them : http://ps-software.net/learn-the-patterns/

That how I see without pro)))
Trading_Jazz ender.genom

i'm not a pro
+1 Reply
feiwuba Trading_Jazz
Thanks Jazz
Good tutorial, but 80%? You'd be rich in a very short time if that was the case. Maybe 55-60% on bats?
Trading_Jazz IvanLabrie
Yes, but there's traders that say around 80% on cyphers, but that can deppend on racios used and i dont know wich they are using. I stay with those 50 and 60%. :-)
IvanLabrie Trading_Jazz
50% is a coin flip.
The thing is to understand the price action, and not blindly look for random ratios like many people do.
If you can make money over time, it's good in my book.
dionvuletich IvanLabrie
No 50% is not a coin flip... if you win 50% of the time but make 2:1 R:R you are getting the same dollars as someone who wins 75% at 1:1, the only difference is that higher win% = smoother equity curve and less likely to have strings of losses > 4-5 in a row. It does not make it more profitable so 50% winners is not a coin flip unless it is at 1:1 R:R

Bats are 60-62% winners in FX from my back testing on nearly every time frame I tested (from 15min to daily) and most pairs but the average R:R was 2.4:1 using scaled targets to a max of the 123% of X-A leg and trailing stop to BE after hitting T1, this gave an expectancy of 1.11 and is by far my favourite pattern

Cyphers do win ~75-80% with the original rules but the R:R can be negative for the first target and slightly positive for the second giving an average R;R of likely 1:1 +/- 0.1 so expectancy would likely be 0.5-0.6, although I actually trade them with a tighter stop loss directly below X and this drops the win% down to around 55-56% but increases the average R;R to 1.46 per trade giving an expectancy of 0.37... I might test the original wider stops and see if they make a difference but I trade them as I tested them similar to bats
IvanLabrie dionvuletich
I'm aware of that.
"If you can make money over time, it's good in my book."
That implies the risk:reward makes it profitable.

Always interesting to learn about more objective ways of analyzing the market, stats are nice. I still think the ratios alone won't make the pattern work. I doubt every trader, or a machine will produce an 80% hit ratio with mechanical cypher trades.
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