Pring on Price Patterns: The Definitive Guide to Price Pattern Analysis and Intrepretation
The use of price patterns is changing the face of technical analysis and trading. In Martin Pring on Price Patterns, today’s unquestioned technical trading master covers all key aspects of technical analysis as they apply to price patterns, in text and examples that are clear, convincing, and easy to understand.
The more I study market action, the more I am impressed by the fact that prices are determined by the attitudes of market participants toward the emerging fundamentals. Consequently, I have tried to expand on the discussions in other books concerning the psychological rationale for many of the patterns. If it’s possible to understand the logic behind these patterns, there is a greater probability that they will be more accurately—and, hopefully, more profitably—interpreted.
A whole section of the book has been devoted to what I call one- and twobar price patterns. These formations typically indicate exhaustion and are often followed by sharp and timely reversals in trend. They are especially suited to the swing and day trader, who is forced by time constraints to act quickly. Earlier books covered some of these patterns, but one of the objectives of this book is to expand on this coverage with some ideas of my own. In addition, I have tried to include a few patterns that are not described in the classic texts, along with a few personal variations. Also, there are some patterns that are described in other books, but that you will not find here.
There are two reasons for this. First, it may be that they do not appear in the charts very often. If I have to hunt through hundreds of years of daily data and am hard-pressed to find an example of a specific pattern, that pattern is hardly of practical day-to-day use. Second, some patterns, such as orthodox broadening tops and bottoms, trigger signals so far away from the reversal point that much of the new trend’s potential has already been achieved. Discussion of such formations has been kept to a minimum or eliminated altogether. So, too, have explanations of patterns where the demarcation boundaries cannot easily and conveniently be drawn. Diamonds and rounding formations come to mind.
Part I. Basic Building Blocks
- Market Psychology and Prices: Why Patterns Work
- Three Introductory Concepts
- Support and Resistance Zones: How to Identify Them
- Volume Principles as They Apply to Price Patterns
Part II. Traditional Patterns
- Using Rectangles, a Case Study for All Patterns
- Head and Shoulders
- Double Tops, Double Bottoms, and Triple Patterns
- Broadening Formations
- Miscellaneous Patterns
Part III. Short-Term Patterns
- Smaller Patterns and Gaps
- Outside Bars
- Inside Bars
- Key Reversal, Exhaustion, and Pinocchio Bars
- Two- and Three-Bar Reversals
Part IV. Miscellaneous Issues
- How to Assess Whether a Breakout Will Be Valid or False
- How Do Price Patterns Test?