This year I shared more than 1000 free swing and intraday trading signals for Forex, Gold, Silver, Oil, Crypto and Major Indexes.
The majority of the setups were based on classic price action chart patterns.
What I did through the trading year, I kept a record of each free signal that I posted: noting the winners, losers and the entry reason.
In this article, I will share with you the most accurate and profitable patterns for trading by accuracy and winning rate.
Best Patterns
First, let me reveal the list of chart patterns that I traded this year:
double top & double bottom,
head & shoulders pattern,
cup & handle,
bullish and bearish flag,
rising and falling wedge,
horizontal channel,
ascending, descending and symmetrical triangles.
And I did not trade every pattern that I spotted. There were some specific criteria that I relied on to confirm the validity of the patterns.
Keep reading and you will learn these criteria.
Real Results
Secondly, you can back test the performance of a trading setup and of each pattern that I shared on my official TradingView page (LINK) by your own.
Simply, use the filter to display the desired pattern.
Tradingview does not allow removing the trading signal once it is posted, so all the results are 100% real.
Key Levels
Thirdly, all the chart patterns that I trade strictly formed on key daily supports and resistances. I never trade the patterns beyond key levels.
For example, the triangle chart pattern on an hourly time frame on EURAUD that I posted recently was formed on a key daily horizontal resistance.
Please, note that the price action patterns alone that are formed far from strong supports and resistances will always have a lower winning rate.
Trading Style
Also, I applied the chart patterns primarily for day trading and swing trading.
The time frames that I used were daily/4h/1h. For scalping, the performance will be different.
Market Trend
And the last thing that patterns in chart patterns trading is the direction of the market trend.
The price action pattern that indicates a price movement against the trend will always have a lower accuracy than the one the aligns with the trend and give a trend following signal.
In the trading setup above, I spotted not only a bullish price action pattern on an hourly time frame but also a strong bullish trend on a daily.
Results
Following all these criteria, here are the winning rates of chart patterns that I traded this year.
Double top & double bottom pattern get 66% winning rate.
That's the example of a perfect double bottom chart pattern for trading.
Remember that the fact that the price formed a pattern does not provide a reliable signal, we trade only after a breakout of its neckline and a candle close beyond, that is our strong confirmation.
Head & shoulders pattern and its inverted version get 69% winning rate.
You can find a valid head and shoulders pattern above. It was formed on a key daily resistance, and the trade was opened strictly after a violation of the neckline.
Cup & handle pattern and its inverted version has 67% accuracy this year.
That's a very perfect cup and handle that the price formed on a key support. Confirmation is the violation of the horizontal neckline.
Bullish and bearish flags get 62% accuracy.
Examine the perfect flag pattern on USDJPY. The market is bullish on a daily and trades within a rising channel. The price formed a bullish flag on an hourly, approaching its support. Our signal to buy is the violation of its upper trend line.
Rising and falling wedges get 64% accuracy.
The rising wedge that the price formed on the chart above perfectly aligns with the up trend on a daily.
Horizontal channel - the range achieves 68% winning rate.
The horizontal range that the price formed after a breakout of a key daily support and its consequent test was broken to the downside, giving a reliable intraday confirmation signal.
The accuracy of ascending and descending triangles gave correct signals in 67% of the trades.
We made a nice profit, buying Bitcoin after a breakout of a neckline of the ascending triangle pattern that was formed on a retest recently broken daily resistance that turned into support.
Symmetrical triangle got 61% winning chance.
The violation of a falling trend line of a symmetrical triangle after a test of a key daily support gave a strong intraday bullish signal.
Combination
The best and the most accurate trading setups were based on a combination of multiple patterns.
It is a situation, when the market forms 2 or even more the-same biased patterns.
The trading setup above combines 2 bearish price action patterns on a key daily resistance: rising wedge pattern and descending triangle. Breakouts of the trend line and neckline of both patterns gave very accurate bearish signal.
Such setups have a winning chance above 70%.
Best Setup This Year
The one setup that gave almost 83% winning rate this year was based on a combination of a falling wedge pattern and a cup & handle pattern within.
In that setup, you can find not only a falling wedge pattern and its resistance breakout but also a cup & handle pattern that formed within and its neckline violation as well.
Always record the results and the entry criteria of your trades.
It will help you to identify the most efficient entry signals and the worst ones.
I hope that my observations will help you in the next trading year.
