Details

<p>Preface xi</p> <p>Acknowledgments xv</p> <p>About the Authors xvii</p> <p><b>Part I Introduction to Trading with Pattern Recognition</b></p> <p><b>Chapter 1 Opening Thoughts 3</b></p> <p>How to Use This Book 3</p> <p>Succeeding or Failing in Trading 4</p> <p>Steps to Take for Successful Trading 7</p> <p><b>Chapter 2 Geometry of the Patterns and Fibonacci Ratios 9</b></p> <p>History of Geometry in the Markets 11</p> <p>Fibonacci Ratios 13</p> <p>Applying the Fibonacci Ratios 15</p> <p>Summary 18</p> <p><b>Chapter 3 Harmonic Numbers and How to Use Them 19</b></p> <p>Where the Term Harmonic Numbers Originated 19</p> <p>Defining a Harmonic Number 20</p> <p>Vibrations in Price Swings 22</p> <p>Repetition in Price Swings 24</p> <p>Finding Harmonic Numbers 28</p> <p>Harmonic Numbers Found in Other Markets 34</p> <p><b>Part II The Price Patterns and How to Trade Them</b></p> <p><b>Chapter 4 The AB=CD Pattern 37</b></p> <p>History of the AB=CD Pattern 37</p> <p>AB=CD Pattern Description 39</p> <p>AB=CD Pattern Structure 39</p> <p>Important Characteristics of the AB=CD Pattern 42</p> <p>CD Leg Variations 43</p> <p>Slope and Time Frames 46</p> <p>Psychology of the AB=CD Pattern 48</p> <p>Trading the AB=CD Pattern 49</p> <p><b>Chapter 5 The Gartley “222” Pattern 53</b></p> <p>History of the Gartley “222” Pattern 53</p> <p>Gartley “222” Pattern Description 55</p> <p>Gartley “222” Pattern Structure 56</p> <p>Important Characteristics of the Gartley “222” Pattern 57</p> <p>Psychology of the Gartley “222” Pattern 59</p> <p>Trading the Gartley “222” Pattern 60</p> <p><b>Chapter 6 The Butterfly Pattern 67</b></p> <p>History of the Butterfly Pattern 67</p> <p>Butterfly Pattern Description 69</p> <p>Butterfly Pattern Structure 70</p> <p>Important Characteristics of the Butterfly Pattern 71</p> <p>Psychology of the Butterfly Pattern 72</p> <p>Trading the Butterfly Pattern 73</p> <p><b>Chapter 7 The Three Drives Pattern 81</b></p> <p>History of the Three Drives Pattern 81</p> <p>Three Drives Pattern Description 82</p> <p>Three Drives Pattern Structure 83</p> <p>Important Characteristics of the Three Drives Pattern 84</p> <p>Psychology of the Three Drives Pattern 84</p> <p>Trading the Three Drives Pattern 85</p> <p><b>Chapter 8 Retracement Entries and Multiple Time Frames 91</b></p> <p>Fibonacci Retracement Entries 92</p> <p>Fibonacci Retracement Pattern Structure 92</p> <p>Trading the Fibonacci Retracement Pattern 95</p> <p>Opening Price Retracement Setups 98</p> <p>Market Setup for the Opening Price Retracement Trade 99</p> <p>Trading the Opening Price Retracement Setup 100</p> <p>Multiple Time Frames 103</p> <p><b>Chapter 9 Classical Technical Analysis Patterns 113</b></p> <p>A Brief History of Technical Analysis 114</p> <p>Basics of Technical Analysis 115</p> <p>Double Bottom and Top Patterns 115</p> <p>Head and Shoulders Pattern 120</p> <p>Broadening Top and Bottom Patterns 126</p> <p><b>Chapter 10 Learning to Recognize Trend Days 131</b></p> <p>Identifying a Trend Day 132</p> <p>Patterns Found on Trend Days 135</p> <p>Fibonacci Ratios on Trend Days 138</p> <p>Controlling Risk on a Trend Day 140</p> <p>Trading a Trend Day 141</p> <p><b>Part III Essential Elements of Trading</b></p> <p><b>Chapter 11 Trade Management 149</b></p> <p>Thinking in Probabilities 150</p> <p>Warning Signs and Confirmation Signs 151</p> <p>Money Management 155</p> <p><b>Chapter 12 Using Options with the Fibonacci Ratios and Patterns 161</b></p> <p>Call and Put Options Defined 161</p> <p>Factors That Influence the Price of an Option 162</p> <p>Controlling Risk with Options 163</p> <p>Examples of Using Options with Extension Patterns 164</p> <p><b>Chapter 13 Building a Trading Plan 167</b></p> <p>Daily Trading Plan 168</p> <p>Trading as a Business 174</p> <p>Disaster Plans 177</p> <p>Summary 181</p> <p><b>Chapter 14 Daily Routines 183</b></p> <p>Trade Preparation 183</p> <p>Mental Preparation 187</p> <p>Physical Preparation 188</p> <p>Appendix 191</p> <p>Index 195</p>

"…should prove valuable to those already practicing technical analysis and who want to take their trading to the next level." (<i>Investors Chronicle, </i> Friday 28th March 2008)

<p><b>LARRY PESAVENTO</b> is a forty-year veteran trader who has one of the most extensive trading libraries in the world. He operates a Web site, www.tradingtutor.com, which provides market analysis for subscribers. Pesavento speaks regularly at trading conferences and is a private trader for a large hedge fund. The pattern recognition approach he uses eliminates the random nature of market action. <p><b>LESLIE JOUFLAS</b> has been trading for over ten years and went professional in 2000. She coaches and tutors trading students as well as moderates and runs www.tradingliveonline.com. Jouflas also trades privately managed money as well as her own account.

<p>Trading the financial markets is extremely difficult, but with the right approach, you can achieve success. Nobody knows this better than authors Larry Pesavento and Leslie Jouflas, both traders and educators of traders, who have consistently used pattern recognition to capture profits from the markets. <p>In <i>Trade What You See</i>, Pesavento and Jouflas examine a technical approach to trading that will allow you to identify patterns as they are developing, and discuss how to implement this method to effectively manage your trades. While some patterns derive from the techniques of Wall Street's earliest traders, other patterns reflect Pesavento's emphasis on the geometry of market movements and Fibonacci numbers. <p>Engaging and accessible, this detailed guide uses a variety of stocks and markets—in the numerous chart examples found throughout these pages—to illustrate how particular patterns form in different markets and time frames. Once you have a solid foundation in the area of pattern structures, you'll become familiar with how these patterns are traded and discover the best ways to integrate them into your own trading endeavors. <p>Divided into three comprehensive parts, <i>Trade What You See:</i> <ul> <li>Reveals how to identify trending conditions and discusses techniques for entering in the direction of the trend</li> <li>Presents proven patterns that range from classical technical analysis to the Butterfly, AB=CD, and the Three Drive</li> <li>Offers in-depth insights on how to use options in conjunction with patterns</li> <li>And much more</li> </ul> <p>But the only way to use the information in this book profitably is by understanding each pattern and following sound trading principles. To help you accomplish this, Pesavento and Jouflas have included guidelines on developing a trading plan that covers: pattern recognition; thinking in terms of probabilities; money management; risk assessment; and techniques for entering and exiting trades. Along the way, they also discuss setting up trading as a business—and preparing for the unexpected—because approaching this discipline from any other angle would be a big mistake. <p>Filled with hard-won knowledge gained through years of market experience, <i>Trade What You See</i> outlines both a practical and sophisticated approach to trading that will be of interest to both new and seasoned traders alike.

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