Analysts, investors, and traders often ask how to determine where a trend comes to an end. The Fibonacci trading tools and the candlestick patterns provide two significant ways to answer this question. Chart patterns are a third method for analyzing trends.
We try to integrate Fibonacci trading tools, candlestick patterns, and chart patterns because, as mentioned, they are all based on the most important element that moves the markets: investor behavior.
The study of chart patterns has gone on for at least a century, and analysts have written many excellent books about this topic over the past decades. Today, many traders prefer to focus on technical indicators that are computer driven and are based on complex mathematical formulas. But computer models have yet to prove that they can consistently outperform pattern recognition as an analysis approach.
The following chart patterns are well known, have a high analytic value, and can be combined with other trading tools described in this book.
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