When I first started trading shares I wanted to know what characteristics the top performing shares had in common. From my studies at the time I discovered the ascending triangle pattern as a reliable indicator of outperformance by a share. I made excellent returns trading ascending triangles back in the technology boom, with returns of over 50% in a week on Solution 6 and 30% in a day on PowerTel.
Further study led me to the reason for the out performance. A period of consolidation in the stock market is followed by a trend then back to consolidation again. This is one of the few universal truths that has stood the test of time and continues to be relevant in the stock market today.
After a few years in the markets I met a programmer who was also convinced that trading chart patterns was the way to make money in the markets. He had developed a computer algorithm that could be used to identify chart patterns. This removed any interpretation and subjectivity that is inherent with identifying chart patterns by eye and allowed us to analyse chart patterns in detail.
From these studies we came to the firm conclusion that trading chart patterns works and proceeded to develop strategies around trading these patterns. The Patterns of Success newsletter returned over 70% on the Australian Stock Exchange (ASX) in 2008 based on a very low risk of just 0.5% of the invested capital on any one trade.
This is an exceptional result considering the market fell 41% during this time and no leverage has been taken into account with this calculation. For your free trial please click Patterns of Success.
During 2008 Patterns of Success identified some fantastic trades. Linc Energy (LNC) was featured in the Patterns of Success newsletter on the 5/9/2008 as it formed an ascending triangle. The newsletter recommendation was to enter the trade if LNC broke through the top of the triangle. Well what a break out. The same day the following release was made to the ASX.
“LNC SALE OF LINC ENERGY'S EMERALD “TERESA” COAL EXPLORATION PERMITS”
“Linc Energy (ASX : LNC) has entered a Heads of Agreement with Xinwen Mining Group Ltd of China (“Xinwen”) for the sale of its Teresa coal exploration permits (EPC980 and EPC 1226) for AU$1.5 billion.”
Not only did LNC sign up a $1.5 billion deal, they were also added to the S&P ASX200 index on the same day. The share price added 42% on the day with those that followed the Patterns of Success report making a gain of over 12% on the first day of holding this trade.
Atlas Iron (AGO) delivered a return of 54% in 10 days as it broke up out of a
symmetrical triangle. Gindalbie Gold (GBG) was another strong performer on the long side returning 47% in 5 days as it broke up out of a channel down.
On the short side Boom Logistics (BOL) returned 47% in 41 days early in the year as it broke down from a descending triangle. Lynas Corporation (LYC) also delivered strong results with a gain of 53% in 21 days from the break out of a symmetrical triangle.
To access fantastic trades like these and many more through a free trial click Patterns of Success.
On average the strategy was profitable on 47% of the trades and returned an average of 3.72% in 8 days. With trades available on both the long and the short side of the market, this makes the strategy perfect for a CFD trader.
Now there is a fantastic opportunity to begin trading Patterns of Success with a proven and reliable strategy that has delivered exceptional results in the most challenging market conditions you are likely to see in your lifetime.
Sceptics often ask if it so good why don’t you trade it yourself. Well I do, I actively trade chart patterns based on the criteria I use to identify the patterns I wish to trade. The computer identifies these trades for me saving me hours of looking through charts every day and delivers me those trades that are ready to breakout today.
The Patterns of Success strategy utilises volume filters to ensure that the shares chosen trade at least $1 million per day. If you wish to trade larger positions in excess of $50,000 per trade please contact us directly so we can tailor a strategy to your exact needs. We actively monitor the trades we recommend in Patterns of Success and if there is any evidence of us having an impact on the market we can release another strategy or adjust the volume filters as required.
Patterns of Success is an end of day strategy so we do not know today’s trades until you do. We can not anticipate which trades will breakout on any day which makes it impossible for us to place orders before our clients. Follow the newsletter for a few days and you will understand that shares in the watch list are not always traded.