Study Guide for the Second Edition of Technical Analysis: The Complete Resource for Financial Market Technicians

Chapter 17. Short-Term Patterns

Chapter Objectives

After studying this chapter, you should be familiar with

• How short-term patterns can be used as a tool to identify reversals in longer-term trends

• The types of gaps that occur on bar charts and the significance of the various types

• Wide-range days and narrow-range days and their implications for volatility

• The formation and interpretation of the most common candlestick patterns

Chapter Summary

Short-term patterns are used to anticipate a sudden move, to take advantage of a period when prices have reached an emotional extreme, or to enter into a trend at an advantageous price as on a pullback or throwback. These methods usually have a setup. A setup occurs when certain known factors needed ...