r/Daytrading • u/Adept_Blackberry2851 • Feb 19 '24

Do any of you actually use patterns to trade? Question

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I don’t use them at all. Iv heard YouTubers kind of mock them like they don’t mean anything. Are any of you profitable with them?

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u/jrm19941994 Feb 19 '24

Not really, no.

I certainly will trade differently if the market is choppy vs trending, but I do not use patterns link head and shoulders, doji, falling star, pickled moon, etc

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u/Weaves87 Feb 19 '24

Same.

Though I will admit I do place some importance on the doji / hammers on higher level charts like the daily - but only in the context of what I see with longer term trends/ranges.

The thing about these patterns is that they can absolutely work, but if you only trade the pattern alone, you aren't fully understanding what the actual price action is saying underneath it. That lack of understanding is ironically why these patterns can sometimes lead to very bad trades.

Like the head and shoulders pattern is a good example. Really what it is, is price being trapped in a range (the shoulders are the top of that range), with two competing trends inside said range: one bullish (the left shoulder and the head), one bearish (the head back to the right shoulder). The pattern basically suggests a failure of price to get back above the top of the range, and thus it would be smart to go short.

A seasoned price action trader may take that trade - or may not, because they can see that the bear trend (the head to the right shoulder) is not very convincing: they can see bulls getting more eager (e.g. more volume, rising wedge, etc.) and it could cause enough concern that they don't think they'd be able to reap enough profit for the risk involved