Building on the basics you'll find in the Futures 101 section, this article examines more advanced chart pattern strategies in precious metals and stock index contracts and how techniques can vary in different market contexts. Learning any new skill, such as driving a car, is awkward. Basic task recognition skills, such as putting the car in drive and even adjusting the side or rear windows, is a project: Once the car is rolling, simple procedures, such as changing lanes and parallel parking, take time to learn. Most of us perform these skills without a second thought now, but that wasn't always the case. Trading is the same way, particularly when it comes to the skill of pattern-based analysis. Recognizing price patterns is a thought process that you must do instantaneously to be effective. In this article, we will examine some advanced chart patterns that are relatively simple to recognize in the real world and lend themselves well to a novice. There are a few basic concepts to understand in chart pattern analysis. Market trends have only three directions to go: up, down or sideways. As traders, we are attempting to understand where we are in the trend. We must know whether we are in a new trend or one that is well established and possibly ggtting long in the tooth. If we are late in the trend, we must be able to recognize the signs of a reversal. If not, we need to recognize signs of a continuation.
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