Sentiment Indicators - Renko, Price Break, Kagi, Point and Figure: What They Are and How to Use Them to Trade

Introduction

The purpose of this book is to give beginning and more experienced traders a fresh look at the principles and applications of alternative charting types. These charts share one significant attribute: they display information independent of time. These types include price break; Kagi; Renko; point and figure, and cycle charts. These charts are important because when the trader applies them correctly, they provide different views of the shape of market sentiment as well as the shape of trends. The hoped-for result is that they will give the trader an enhanced ability to detect changes in price action. The use of these charts can have a significant impact on trader fitness levels, which most traders are looking to improve. (There are very few traders that cannot improve their performance.) There are even fewer that are consistent. A huge trader training industry supplies a seemingly unending stream of content and tutorials, in seminars and on the Web, with the goal of assisting traders. The search for new tools and techniques is all-consuming, but the ability to improve trading does not rest on a new technique. Rather, it centers on the trader's own behavior.

In over a decade of trader training, I have found that trader inconsistency and trading losses often arise from the central error of participating in counter-trend trading, as well as timing errors. While there are many other sources of strategic and tactical trading errors, this book focuses on the critical area of ...