Visual Guide to Chart Patterns is a concise and accessible visual guide to identifying, understanding, and using chart patterns to predict the direction and extent of price moves. Packed with visual learning enhancements and exercises, this innovative book helps savvy investors and professionals alike master the essential skills of chart pattern recognition. Follow along as chart pattern expert Thomas Bulkowski teaches you to recognize important peaks and valleys that form patterns―footprints of the smart money.
Introduction:
Sometimes before I trade, an inner voice speaks to me. Some may call it the voice of experience, but I prefer to call it the voice of knowledge and wisdom. When I have listened to that voice, it has saved me money. One goal of this book is to provide the knowledge so that you can create your own trading voice. Whether you are a professional trader, money manager, or retired schoolteacher trying to boost the inheritance for the grandchildren, this book is for you.
From the expert to the novice, there is information about chart patterns that you do not know or may have forgotten. This book will provide a visual guide to learning about chart patterns in a manner that is simple and easy to understand. Consider this book an instruction manual for recognizing chart patterns, discovering why they behave as they do, and learning what it means when you see one. You will learn to see not squiggles on price charts, but footprints of the smart money; not a mountain range, but double tops, rectangles, and head-and-shoulders.
The basics come first so that we speak the same language. What you learn in this section may surprise you. The basics provide a foundation for what follows. Then we cover the most important and popular chart patterns. This is where you discover that not every peak or valley is a chart pattern. What to look for and why they form are in this section.
Completing the book are buy and sell signals. I do not offer mechanical trading systems, but visual ones that can help make you money or avoid losing it. When you turn the last page of this book, my hope is that you leave with a greater understanding and knowledge of chart patterns, knowledge that can serve as food for the inner trading voice. Should that voice speak to you, listen. It could save you a bundle. And if you find yourself arguing with that inner voice at the grocery store, then blame me.
Contents:
- Pattern Recognition Made Easy
- Minor Highs and Lows
- Trendlines
- Support and Resistance
- Gaps
- Throwbacks and Pullbacks
- Rectangles
- Ascending Triangles
- Descending Triangles
- Symmetrical Triangles
- Flags and Pennants
- Double Bottoms
- Triple Bottoms
- Double Tops
- Triple Tops
- Head-and-Shoulders Bottoms
- Head-and-Shoulders Tops
- Basic Buy Setups
- Failures
- The Throwback Buy Setup
- Measuring Flags and Pennants
- Busted Pattern Buy Setups
- Trading Setups and Tips
- Chart Pattern Sell Signals
- Busted Pattern Sell Signals
- Triangle Apex Sell Signal
- Trendline Sell Signals
- Swing Rule
- A Tale of Two Trades
