The Illustrated Guide to Technical Analysis Signals and Phrases provides traders with illustrations of more than 275 key chart patterns along with their most important variations.
This book solves a problem you might have when you first set up a technical analysis software service if you are very unfamiliar with the methods used or if the software is new to you. For example, vendors such as CQG and TradeStation set up point-and-figure parameters differently to produce the same chart results.
Introduction:
The Illustrated Guide to Technical Analysis Signals and Phrases will introduce you to point-and-figure charting, and if the patterns illustrated tell you a clear story, then you may be more motivated to invest in a book specializing in this area.
This book offers you a gold mine of trading directional signals that took years of experience to collect. We traders are just a growing logic tree of signals, and it is hard to put words around them all.
Your observation skills will be put to the test by this book. Here are a few guidelines on what to study. Focus closely on such things as price closes versus opens when arrows are added to the chart. Study charts from right to left, and see if the signal or level or pattern has been significant for the market in the past. Any area highlighted in gray is significant.
Market geometry is huge in my view. When making a careful evaluation between methods, study the reactions on both market tops and bottoms. Does an indicator make complex tops and simple V bottoms? Study the source of a trendline and the minor anchor points selected.
When I teach, I find most people look for patterns that are far too wide or large.
It is the attention to detail that makes a great technician, but keep in mind the goal is to answer what will happen in the next bar, not to detail the squiggles through a chart for historic prosperity.