Options Made Easy: Your Guide to Profitable Trading, Second Edition

Basic Chart Patterns

Here we are going to go through the standard chart patterns you need to become familiar with as you become a more accomplished trader. Some people take the view that Fundamental and Technical Analysis are mutually exclusive and incompatible. This is simply not the case. A far more balanced view is that while Fundamental Analysis is more reliable for the long-term health of a company, Technical Analysis can complement this and augment your shorter-term trading aspirations. You should get into the habit of looking at charts as well as doing your fast screenings for fundamentals.

There are two basic types of chart pattern, momentum (breakouts) where the security is gathering momentum and is likely to move further in that direction, ...