Technical Analysis: Chart Reading for Beginners

By Gail Findlater

A must have guide for identifying chart patterns for novices and experienced traders alike.

Technical trading clues off of commodity charts enable enthusiasts to trade futures commodities and stocks efficiently and effectively.

While observing the yearly and daily charts you will notice the same patterns occur repeatedlyand may even show on the daily and hourly charts. The High, Low, Close of the day that you see is not the whole story as there are minute to minute fluctuations that also form patterns that provide clues as to how the market may react!

Call it divination if you like but knowing what is happening in advance offers the charting enthusiast time to make a plan and institute it instead of being in reaction mode like fundamental traders are prone to be or just all out guessing!

THE TRICK IS TO AQUIRE THE SKILLS TO IDENTIFY THESE PATTERNS AS THEY DEVELOP!
The goal of this "Technical Analysis" reference is intended to help the technical trader identify patterns as they occur and use this skill to their advantage!

This book is a perfect gift for yourself, the person in your life that is interested in learning the techniques and "lingo" to get started in this fascinating business or the person who is actively trading. It provides a quick visual review of the patterns in the gallery and a trade tracker for easy review of your trades whether you are paper trading or seriously committed.

Once you read this reference guide you will want to keep it within easy reach during your daily market watch especially if you have a trade in progress.

• Language: English
• Publisher: Xlibris US
• Release date: Apr 23, 2015
• ISBN: 9781503525979

Gail Findlater

Gail Findlater was born and raised in Prince George, B.C.and raised her family in the magnetic northern areas of Houston, Smithers and the Queen Charlotte Islands. Entrepreneurially minded she helped build and sell several small businesses in those communities. Trading Futures Commodity Markets off of Technical Charts started as a hobby and it quickly became a passion. She also enjoys going on cruises, travelling and loves animals, nature, dancing and cooking. Her travelling adventures include trips to Hawaii, Costa Rica, the Bahamas, Guatemala, Belize, Ecuador and Mexico learning survival Spanish in the process and making many friends and wonderful memories She is now settled in the northern Okanagan town of Vernon, British Columbia and has two children and five grandchildren that she is very proud of.

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Copyright © 2015 by Gail Findlater.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Thinkstock.

Rev. date: 04/21/2015

Xlibris

1-888-795-4274

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Contents

Introduction

Trading Styles

Charts

Brokers

Technical Analysis Of Commodity Charts

The Dow Theory

The Three Trends

Major Trend Phases

Bull Market

Bear Market

Channel

Principal Of Confirmation

Intermediate Trendlines And Channels:

Tests Of Authority

Amendment Of Trend Lines

Fan Lines

Major Trendlines:

Support And Resistance:

Reversal Patterns

The Head And Shoulders Top Formation

The 123 Bottom Formation

Multiple Head And Shoulder Patterns

Rounding Bottoms (Bowl Or Saucer) And Tops (Inverted Bowls)

Channels/Dormant Bottoms

Triangles

Symmetrical Triangles

Ascending Triangle

Descending Triangle

The Rectangle

Double And Triple Tops And Bottoms

Other Reversal Phenomena Broadening Formations

Inverted Triangle

The Orthodox Broadening Top

The Diamond

Wedge Formations

Wedge

The One- Day Reversal

Consolidation Formations

F1ags And Pennants

The F1ag

The Pennant - A Pointed Flag

Rectangular Consolidations And Early Phase Phenomenon

Scallops - Repeated Saucers

Gaps

The Island Reversal

Trading Plans

Long Positions:

Short Positions:

Options:

Options For Insurance

Stop Loss Orders For Insurance

Strangle/Straddle Strategy

Important Reminders

Glossary Index

Ascending Triangle

Bear Market

Bull Market

Channel

Descending Triangle

The Diamond

Fan Lines

The Flag

Gaps

Classic Head And Shoulders Bottom

Double Head And Shoulders Bottom

Classic Head And Shoulders Top

Triple Head And Shoulders Top

Inverted Triangle

The Island Reversal

The Orthodox Broadening

The Pennant - A Pointed Flag

The Rectangle

Scallops - Repeated Saucers

Support And Resistance

Symmetrical Triangles

Wedge

INTRODUCTION

W ELCOME to the world of Technical Chart Analysis! This manual will take you through the basic chart patterns and assist in developing a plan for entry and exiting a stock or futures commodity contract whether you are paper trading, serious about trading with real currency or are just interested in getting to know more about the busi ness.

You will also get a small taste of some of the many trading plans that can be utilized for your protection and benefit.

This manual and the glossary is intended to help identify chart patterns and give you the reader an idea of the direction the chosen commodity or stock is likely to go.

There is a big difference between Technical Trading and Fundamental Trading.

TRADING STYLES

The Fundamental Trader analyzes fundamental factors such as supply and demand as well as other factors such as reports, news and weather to make their decisions. They listen to the mainstream media for clues and wait to see what the outcome of reports and meetings have on markets. This makes it very difficult as it is hard to foresee what the future holds putting you into reaction mode constantly as the market generally anticipates the move ahead of time and adjusts afterward.

The Technical Trader doesn’t totally disregard fundamentals but RELYS on the historical data produced in charts to study price PATTERNS to anticipate future price fluctuations. It doesn’t matter what the futures commodity is and you don’t have to understand the industry or company. If it can be charted it can be analyzed and the charting enthusiast can anticipate well in advance the future moves the commodity or stock will make. He has the luxury of time to make a plan and has a good chance at being correct a good percentage of the time.

CHARTS

Monthly and weekly charts are referred to as long term or major charts and are used chiefly to determine important support or resistance levels and marking long-term trends.

Daily and intra day charts are used to determine patterns and making a plan for entry or exiting a market.

In order to target markets to enter a speculator searches for markets making an ANNUAL high or low and watches for a reversal pattern or a tradable pattern like a channel, gap, flag or triangle for instance.

There are several internet companies that offer free chart service for the stock and futures commodity markets as they trade live (with several minute delays) on the internet…These are usually companies that compete for your business once you decide to set up an account and fund it. A broker will be assigned to take care of your needs at that time.

These are good practice charts while you are becoming familiar with the patterns that are constantly repeating. You will notice that you can convert each commodity chart into minutes through to hours, days and years… ALL these charts are valuable to you and necessary to make plans and decisions as well as set targets. A serious trader will buy a chart service that is live with no delays so he can see exactly what his commodity of choice is doing in the moment and there is no guessing or waiting for confirmations.

Be aware that by changing the size of the chart on your computer it changes the look of the chart and chart companies change the sizes according to the ranges the markets trade in so you can see the entire picture. Even a stagnant market can look exciting if the chart lines appear to be large moves because the market trades in a small range. Always check to see what each tick is worth in points to determine the values.

There will be an information box with each chart that gives you the commodity, the month and year, values of each tick, margins etc. for you to be able to identify to your broker which market you are looking at investing in. Please note every trading month in a commodity contract stands alone and may or may not trade identically. Use this to your advantage as it gives you a clue where it will be in the future.

The long term charts or historic charts will give you positive, unmistakable proof of whether you are looking at a Bull Market, a Bear Market or a Channel also called a Stagnant Market. These are The Primary Trends.

The shorter term annual charts help you determine the Intermediate trend… whether the market is in a short term correction or not.

Firstly you will want to look at the annual