Visual Guide to Chart Patterns

A Tale of Two Trades

In this book, we started with the basics: trendlines, gaps, throwbacks, support and resistance, and a few other flavors to spice up the text. Following that was pattern identification of chart patterns formed by horizontal lines, diagonal ones, and then bumps such as double tops and head-and-shoulders.

I discussed visual buy and sell signals, and that is where chart patterns excel. With each breakout, a trader is given the opportunity to make money in a stock or exit a position before it takes an ambulance ride.

Trading chart patterns is easy, but making money using them is not. Chart patterns work only when the market trends. ...