Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology

CONCLUSION

In this chapter, two groups of patterns have been described—the short-term patterns and the long-term patterns. Short-term patterns are often reversal patterns that show combinations of price bars ranging from two to five trading days, and are much easier to identify when displayed in candlesticks. Such candlestick patterns include the morning star, evening star, dark cloud cover, piercing line, and so on. They give traders the underlying signs of investors’ confidence and alerts to the probable change in trend in the near term. Though a single candlestick may indicate the bullishness or bearishness of a specific period, it is strongly recommended, as described in the chapter, that trading decisions should not be based on one candlestick. Long-term patterns take a longer period in their formations, which may sometimes be prolonged to several weeks. They are the classical patterns having names that are derived from their shapes, such as double tops (“M” patterns), double bottoms (“W” patterns), head and shoulders, saucers, rectangles, and so forth. Compared with short-term patterns, long-term patterns indicate a longer-term projection of the underlying trend. Though short-term patterns may appear more frequently than long-term patterns, traders should not make decisions solely on the basis of short-term patterns without taking into consideration other supporting indicators. A short-term pattern may be formed within the overall picture of the long-term pattern, and when ...