Part III: Trading tools

Chapter 9: History never repeats. Are you sure?

In this chapter, you will learn that:

• Sure History Never Repeats is a catchy song title. However, when it comes to trading, this saying is wrong. Dead wrong. Past share price behaviour can be used to estimate future share price direction and I’ll show you exactly how.

• The basic building blocks of a chart involve a graphic display of price and volume action. You may choose to use bar charts, line charts or candlestick charts.

• Candlestick charts are the best charts to use. Bar charts and line charts look boring and ugly.

• When looking at the patterns candlestick charts show, take into account the candle colour, the candle length and the tail location.

By using price ...

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