The Benefits of Developing—and Sticking to—a Go-to Chart Pattern
01/15/2016 6:00 am EST
For the benefit of any trader who has ever questioned his own strategy, Rob Colville, of TheLazyTrader.com, offers two reasons he feels it’s crucial that traders identify—and then stick to—just one preferred chart pattern.
Imagine you were at a cocktail party with other traders, sharing stories and talking about your trading. In just a sentence or two, how would you describe yourself to an audience of your peers to explain what you’re about, the strategy you favor, and which is your preferred chart pattern?
Take a minute and think how you’d explain what really makes you tick as a trader and then consider this: Are you focused solely on trading your best strategy and your bread and butter chart pattern or are there times when you stray from them in order to chase some hot, new chart pattern or set-up, test out some outside indicator(s), or even try your hand at other markets or time frames?
I honestly believe that every trader, from time to time, can only benefit by going back to basics, reminding themselves what they do best, and becoming recommitted to doing just that, no more and no less. So before I share with you the chart pattern that powers my trading, make sure you take time to consider what kind of trader you are and which chart pattern is your bread and butter?
Why You Need a Go-to Chart Pattern…
We’ve talked before at length about the all-too-common misconception that successful traders use all kinds of different methods and nimbly switch from one chart pattern to another depending on market conditions. Some do, but plenty of others simply stick with what they know (and what already works) and that enables many traders to use a single chart pattern—perhaps the first one they ever learned—for success and prosperity for the balance of their trading careers.
Here are two more reasons why traders should identify—and then stick to—just one preferred chart pattern:
So you know what you’re looking for…and so you know it when you see it. Think about coming into the markets each day with a distinct purpose, trading with more confidence and clarity, and never having to switch strategies on the fly. You can do that when it’s one chart pattern—and not several—that you’re looking for. Plus, when it’s your go-to chart pattern, you know it inside and out and you’ll never have to guess whether that’s really a doji, a cup and handle formation, or one of the many intricate Gann or Elliott wave patterns that we’re actually hearing more and more about nowadays. To read the entire article click here…
By Rob Colville of TheLazyTrader.com