Thought I,d move into the area of Technical Patterns---in here we will also look at GAPS and how to trade them.
Firstly Patterns like any technical (Or Fundamental) analytic tool can and do fail.Most agree that patterns are no better than a random formation on a chart.We wont get involved in the arguement here other than to realise that all and any analysis must have solutions to failure as well as success!!
We will look at Continuation patterns and Breakdown/Reversal patterns.
How to interpret them----measure them---and practical analysis to look at how to trade them.----Setting of Stops---price targets(Measured Moves) and breakdown stratagies.This is a long interesting and varied topic.
Must Reads and standard library requirements.
The BIBLE of Technical analysis.
Technical Analysis of Stock Trends---Edwards and Magee
Not far behind.
Technical Analysis of the Futures Markets---John Murphy.
We will start with Interpretation of TRENDLINES and SUPPORT and RESISTANCE.
Then move to Major CONTINUATION Patterns.
Triangles---Flags---Pennents---Wedges---Rectangles---Diamonds among others
Later we will look at Reversals and Consolidation Patterns
Through out the discussion if I or anyone else finds a pattern in a chart unfolding please put it up as a SEPERATE chart discussion---so we can work through it as it unfolds---this is great experience.