You're navigating conflicting opinions on chart patterns. How do you determine their true significance?

When navigating conflicting opinions on chart patterns, a systematic approach is key. I verify patterns through objective criteria such as symmetry, volume behavior, and the duration of the formation. I also use statistical backtests to assess the historical reliability of the pattern. Combining various indicators and timeframes can provide additional confirmation. Finally, it’s important to consider the broader market context and macroeconomic factors to correctly interpret the pattern’s significance.

To handle conflicting chart patterns in technical analysis, it’s helpful to use additional indicators like moving averages or the RSI for confirmation. Analyzing patterns across different time frames can also provide clarity, as a pattern that appears conflicting in the short term might be clearer in the long term. Trendlines and support/resistance levels offer further guidance to better understand market direction. Lastly, patience and discipline are crucial to avoid hasty decisions and wait for clearer signals.

Become mechanical. Technical analysis is not a sure thing, so it's important to find what works through a huge backtested data sample, and then mechanically execute this in live markets. If the system generates a 70% strike rate, you know there is a 2.7% chance of being wrong 3 times in a row. While this is low, it is still possible, so the analyst must bear this in mind and expect the unexpected. A conflicting signal shouldn't arise from a mechanical plan as it either fits the entry criteria or doesn't. I find this method particularly useful for removing discretion, subjectivity and emotion.