"Chart Pattern" Posts

A Library Of Trading Edges And Statistical Biases

By Lawrence

As promised to my premium members I would publish my work here before they go into collections of ebooks. I have a slight change of plan now which delays the ebook publishing part and focus more on completing the library here first. In another words, I am accelerating the speed of posting various specific trading […]

SPY Locked In Stair Step Up Pattern Since Beginning of 2013

By Lawrence
SPY Long Term_20130507_114319

The blue boxes below is defined by the range of January 2013. Nothing magical. STOPD at work.

Spike And Ledge

By Lawrence
Spike and Ledge chart pattern. DaytradingBias.com

Part of Art of Chart Reading Summary Spike and ledge is a terminal pattern that happens more often in indices and post news shock environment. The concept is simple and easy to follow. It is one of the best short term trading patterns in terms of risk reward payoff. Traders have given this pattern many […]

False Breakout – The Most Misunderstood Pattern

By Lawrence

Part of Art of Chart Reading Traders often focus on how accurate certain chart patterns are and how much money you can make from using the patterns. The more experienced ones would add to their consideration of the risk reward profile of the patterns they choose to use. However, many traders never plan to react […]

Price Moves Like We Breathe

By Lawrence

Part of Art of Chart Reading The basic types of price movements are just contraction and expansion. It is similar to how we breathe. It cannot be simpler.

2013 Recurring Nightmare For The Bears

By Lawrence
ES 1M Hist_20130102_153624

First trading day of the year marked by red arrow and December month high marked by red horizontal line. Back in 2012:   And now 2013:   As stated in previous piece, 2012 Year End Deja Vu, that gap from 2011 was never filled. It is a first for such gap to not fill within […]

2012 Year End Deja vu

By Lawrence

2012 started the year with a 20+ points gap to the upside from 2011 close. And that gap was never filled. It is the first time in S&P history that a gap from the year before not filled in the year right after. And now a year later, right before the 1st week of January, […]

Essence of Trading: Price Goes Up And Down

By Lawrence
iStock_000017014380XSmall

Before you spend time even thinking of the more complex price patterns or technical setups, have you even paying any attention to the most basic foundation of the price charts, like the price bars themselves? It does not matter you use candlesticks or open-high-low-close bars (OHLC bars). The important thing is whether you know anything […]

Channels

By Lawrence
Channels_20121127_124835

Part of Art of Chart Reading Channels is an interesting structural behaviour with non-random price movements. With purely random generated data series, channels rarely show up. It is one of the most important evidence that real market data are not random. Channels essentially are extended usage of the trend lines. The way that price is […]

Pockets

By Lawrence
Rising and Falling Wedges_20121126_221112

Part of Art of Chart Reading Pockets have a very special position within the core set of chart patterns. Unlike any other chart patterns, pockets are not defined by what is being there but what is missing. Pockets are very powerful price magnets often ignored by chart readers due to their subtle existence. Pockets can […]