Stocks & Commodities V. 25:6 (16-26): How Effective Are Rectangles? by Markos Katsanos

Stocks & Commodities V. 25:6 (16-26): How Effective Are Rectangles? by Markos Katsanos
Item# \V25\C06\108KATS.pdf
$3.95
Availability: In Stock

Product Description

Stocks & Commodities V. 25:6 (16-26): How Effective Are Rectangles? by Markos Katsanos

Its one of the oldest patterns in technical analysis, but how reliable is it? By statistically evaluating the performance of rectangle formations, we can derive a new formula that can remove the guesswork from estimating the price target.

After having traded rectangle formations for some time, I discovered the traditional measuring formula to be too conservative and its use almost always resulted in premature exits. Technical literature about these formations provides only a minimum price objective but not an average or most likely target. The classical method used for measuring these reliable and profitable formations is simple and straightforward, but how accurate and reliable is it? Given the limited amount of statistical studies on the subject, I decided to investigate.

For the purpose of this study I found 100 rectangle formations for the preceding two-year 200405 period. My criterion for including a pattern in the list was a sideways price action bounded by two horizontal or nearly horizontal support & resistance lines. I then made note of the price level of the support & resistance lines, the rectangle duration, slope and volume trend, the price at the breakout above the upper rectangle boundary, and the first short-term top. Other interesting statistics I noted were the volume on the breakout day, the duration, magnitude, and timing of any throwbacks following the initial breakout, and also the direction of any premature or false breakouts. Statistical analysis of the results revealed some surprising findings contradicting some widely accepted principles.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order