<s> A Short Coursein TechnicalTrading
PERRY J. KAUFMAN
John Wiley & Sons, Inc.
A Short Coursein TechnicalTrading
Founded in 1807, John Wiley & Sons is the oldest independent publishingcompany in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketingprint and electronic products and services for our customers’ professionaland personal knowledge and understanding.The Wiley Trading series features books by traders who have survivedthe market’s ever changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice trader,professional, or somewhere in-between, these books will provide the adviceand strategies needed to prosper today and well into the future.
For a list of available titles, visit our Web site at www.WileyFinance.com.
A Short Coursein TechnicalTrading
PERRY J. KAUFMAN
John Wiley & Sons, Inc.
This book is printed on acid-free paper.Copyright © 2003 by Perry J. Kaufman. All rights reserved.Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United StatesCopyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center,Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or onthe web at www.copyright.com. Requests to the Publisher for permission should beaddressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street,Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: permcoordinator@wiley.com.Limit of Liability/Disclaimer of Warranty: While the publisher and author have used theirbest efforts in preparing this book, they make no representations or warranties withrespect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. Nowarranty may be created or extended by sales representatives or written sales materials.The advice and strategies contained herein may not be suitable for your situation. Youshould consult with a professional where appropriate. Neither the publisher nor authorshall be liable for any loss of profit or any other commercial damages, including but notlimited to special, incidental, consequential, or other damages.For general information on our other products and services, or technical support, pleasecontact our Customer Care Department within the United States at 800-762-2974, outsidethe United States at 317-572-3993 or fax 317-572-4002.Wiley also publishes its books in a variety of electronic formats. Some content thatappears in print may not be available in electronic books.For more information about Wiley products, visit our web site at www.wiley.com.ISBN 0-471-26848-8Printed in the United States of America.10 9 8 7 6 5 4 3 2 1
Contents
Preface
vii
Acknowledgments
ix
1. Timing Is Everything
1
2. Charting the Trend
18
3. Breakout Trends
36
4. Calculating the Trend
51
5. The Trading Game
78
6. Channels and Bands
91
7. Event-Driven Trends
107
8. Controlling the Risk of a Trade
118
9. One-Day Chart Patterns and Reversals
130
10. Continuation Patterns
145
11. Top and Bottom Formations
153
12. Retracements, Reversals, Fibonacci Numbers, and Gann
167
13. Volume, Breadth, and Open Interest
180
14. Momentum and MACD
199
15. Overbought/Oversold Indicators and Double Smoothing
213
v
vi
CONTENTS
16. Managing Your Entry and Exit
235
17. Volatility and Portfolio Management
243
18. Dow Theory
262
Review Questions
275
Answers to Chapter Questions
287
Review Answers
307
Index
317
Preface
rading is all about making money. Technical trading uses chart patterns, indicators, some simple math, and clear rules to make money.There are many successful traders who use instinct, but I believethey’ve got a computer going inside their heads, looking for patterns and signals that tell them prices are going to surge ahead or stop and reverse. Experience teaches you what works and what doesn’t work.In this course we’re going to take some simple ideas and turn them intosuccessful trading. If you can’t turn an idea into profitable returns, thenyou’re wasting your time. Trading is really all about making money.I was fortunate to have stumbled into this industry in 1970. As far as Iknow, no one studies to be a trader—it just happens. You watch stock or goldprices going up or down because of a series of front-page news events, andsomehow you decide that here is a profit opportunity. You open a brokerageaccount and make a trade. Win or lose, you can’t stop. It can be the fastestway to making or losing a fortune. When you start out, you have the overwhelming feeling of participating in the ideal of Free Trade. You are makingthe price and you are trying to beat the market—the collective action of allthe other buyers and sellers. It’s exhilarating.When I was asked to teach a graduate course in technical analysis atBaruch College in the spring of 2002, my first thought was, “Technical analysis just isn’t enough.” The students need to come away with a skill that theycan use and build on in the future. We were still immersed in the Enron collapse, and the press was exposing the conflicts of interest between the market analysts and the investment banking departments inside the majorbrokerage houses. All of a sudden, we couldn’t trust the information that wasbasic to making a buy or sell decision.Using technical analysis is an unbiased way of evaluating a stock, index,or futures market. If the price is going down, it doesn’t matter if the analystis reporting that the company is undervalued, or that the pro forma performance shows a potential profit in six months—the timing is not right to buy.
T
vii
viii
PREFACE
However, technical analysis isn’t enough. It doesn’t tell you how to trade.There is a big gap between analyzing the market and trading, and it is filledwith trading losses. How can you bridge that gap without making every mistake yourself? You can learn from someone with experience. Good advicemoves you along faster, but making mistakes yourself is an important andunavoidable way to learn. This course is intended to do both—teach youwhat works and give you a chance to make mistakes without costing you anything. You’ll find traditional instruction alternating with “words of wisdom,”a series of trading games that I encourage you to play, and comments on whatis likely to go wrong when you trade. Those comments are the result ofreviewing the trading of other ambitious students. We can learn from theirmistakes in order to make fewer mistakes of our own.I’ve been developing trading systems for 30 years, traded them myself,and directed others while they were being traded. I’ve profited from their successes and lost when they failed. By now I have a good understanding ofwhat works and what doesn’t work, and why. This course is an effort to passon that knowledge to you.In case you’re thinking that this is a magical method for profitable trading, you’re wrong. There are no secrets in this course, just sensible methodsand hard work. You should be able to take what you learn and use it as a solidfoundation for moving forward, or you can trade successfully using onlywhat you learned in this course.
OTHER READINGThis course is based on experience; however, there are other books that can beused to expand each lesson. John Murphy’s Technical Analysis of the Financial Markets (New York Institute of Finance, 2000) is always a good place tostart. Jack Schwager’s Schwager on Futures: Technical Analysis (Wiley, 1996)covers charting step-by-step and adds another level of understanding. PerryKaufman’s Trading Systems and Methods, 3rd edition (Wiley 1998), my ownbook, has much more extensive coverage and evaluation of trading techniques.The last lesson in this course is based on a fine article by Ralph Acampora andRosemarie Pavlick, “A Dow Theory Update,” originally published in the MTAJournal, January 1978, reprinted in the MTA Journal, Fall-Winter 2001.PERRY J. KAUFMANRedding, ConnecticutMay 2003
Acknowledgments
y thanks to the students of Baruch College Graduate Course inFinance, FIN 9790, Spring 2002, for their enthusiastic participation,and to Bill Abrams, the best student of all, who never stops learning. Bill has been a constant supporter of my efforts and an invaluable aid inreviewing the manuscript. My appreciation to David Krell, who motivatedthis effort and continues to help facilitate education and knowledge in thefinancial industry.I would like to acknowledge the gracious help of TradeStation Technologies, Inc., and Janette Perez for providing their systems. Since theirinception, I have found their programmable platform an indispensable toolfor implementing many of my strategies. The charts in this book were allproduced using the TradeStation Platform.My warmest thanks to my mother for, besides other things that mothersdo to make things work, her very astute comments when reviewing themanuscript.Of course, the most important and extensive help came from my wife,Barbara, who worked along with me every weekday and every weekendreviewing the constant flow of hundreds of orders in the Trading Game. Itwas an effort far beyond the call of duty.And, to all the dedicated teachers who give so much to future generations.
M
P. J. K.
ix
CHAPTER 1
Timing IsEverything
This course is about how to trade, not how to hold a position. It’s about beingon the right side of the hill. It will teach you when to buy, when to sell, andhow to take losses before they affect your net worth.There are some basic market truths that everyone needs to know beforetrading. One of the most important things to learn is that things change.Because things change, you need to ground yourself with trading facts. Afterall, you are going to be immersed in stock prices, interest rates, and the barrage of information that floods the news. You will need to know some of theterms used in trading and in analyzing price patterns. You’ll also want toknow what works and what doesn’t work—mostly what works—and why.For the answer to this last question, you will need to work your way throughthe lessons. By the end of this course, you will understand why a technicalapproach to trading makes sense.
THE MARKET CHANGESThe stock market is evolving. It is not the same as it was 10 years ago, or even5 years ago. That’s good news for those of you starting now because youwon’t be burdened by unnecessary and incorrect ideas about the way themarket should act. Consider the obvious things that have changed:• The equipment is faster.• The people who are trading are more knowledgeable.• More people are using the markets—there is more competition.• Exchanges are becoming electronic.1
2
A SHORT COURSE IN TECHNICAL TRADING
FIGURE 1.1a Unprecedented trends. S&P 500 trends 1993–1997. The mid-1990s had anunprecedented bull market. Nearly any purchase was highly profitable. From 1995 through 1997the S&P gained 50 percent.
• A lot of the order entry is computerized.• Commissions are so low that they no longer force you to hold a trade fora long time just to break even.• Improved communications technology has caused globalization.• New trading vehicles, such as trusts, Fed funds rates, single stockfutures, and derivatives have changed the way institutions and individuals use the markets• Everyone reacts to news faster than ever before.• We’ve discovered recently that the recommendations of stock analystsoften were biased.How could prices move in the same way now, when the basic structure of themarket is in constant change?The importance of these changes is that what was successful trading inthe past is unlikely to work as well today—if at all. During the 1990s we sawan unprecedented bull market trend in stocks that stretched around most ofthe world. That was followed by an equally dramatic, highly volatile drop inprices and an erratic sideways price period. In Figure 1.1a, we see the S&P
Timing Is Everything
3
FIGURE 1.1b Unprecedented trends. Microsoft trends 1995–1997. Much like the S&P,Microsoft moved steadily higher from 1995 through 1997, gaining 260 percent, a remarkable86 percent per year.
500 index from 1993 through 1997, and in Figure 1.1b, Microsoft from late1995 through 1997. The trends are remarkable. During the last three years ofthat period, the S&P 500 gained 50 percent, and Microsoft gained 260 percent.We see how quickly these markets can change in Figure 1.2. The S&P(Figure 2.1a) loses 50 percent of its value during 2000 and 2001, with verysharp drops and mild rallies. Microsoft (Figure 1-2b) loses half of its value,changing to an erratic, volatile sideways pattern before dropping half itsvalue in one month. As if global warming affected the markets, we are seeingone extreme after another.
HOLDING ON FOR THE BIG PROFITOf course, you can still profit from a buy-and-hold approach, given enoughtime. You also can profit from a sustained policy of the Federal Reserve tolower interest rates and stimulate growth—a plan that can last two years ormore and create trends in everything from stocks to real estate and art. But whenyou hold a position for a long time, you are exposed to more price fluctuations
4
A SHORT COURSE IN TECHNICAL TRADING
and more risk. With the exception of the mid-1990s, there haven’t been manyperiods of high profitability for investors and long-term traders.Beginning in 1999 anyone holding equity positions found out that thestock market doesn’t just keep going up. It’s been three years of downward,sideways, and volatile price movement; trying to keep losses to a minimumisn’t easy. Investors are now looking at the market with the eye of the trader,trying to hold a position when it’s doing the right thing and getting out whenit’s not. There’s nothing wrong with that approach. In fact, there’s a lot that’sright with it.
EXTRA BENEFITS OF TRADINGWhen you actively trade a stock or a futures contract, you are not holding aposition all of the time. That’s very important because stocks spend a lot oftime doing nothing, or doing the wrong thing. To offset these sometimesprolonged periods of aggravation or boredom, we get an occasional priceshock, such as September 11, 2001, the U.S. invasion of Kuwait, a presidential
FIGURE 1.2a
Changing markets. 2001 and 2002 show a completely different picture forthe S&P, dominated by volatile downward price moves and erratic sideways periods. Tradingtechniques that worked for the strong trends in the mid-1990s do not work from 2000 to 2002.
Timing Is Everything
5
election, or a surprise interest rate increase by the Federal Reserve. A priceshock causes an unpredictable, large jump in prices.Note that the term unpredictable means that you can’t plan to make aprofit, no matter how clever you are. When you are always in the market, youwill always be tossed around by price shocks, most of them small, a few ofthem very big. We’re going to spend some time throughout this course looking back at price shocks. They are the rare random events that cause thegreatest losses among traders. The longer you trade, the more you’ll see priceshocks. You don’t ever want to make the mistake of thinking that it wasskill that netted a big profit from a price shock. It was luck. Next time, orthe time after, you won’t be lucky. It’s a 50-50 chance.
WHAT IS TECHNICAL TRADING?Technical trading is the process of making trading decisions based on clear,objective, predetermined rules. Those rules apply only to price data, volume,and for futures markets, open interest. You could include other economic
FIGURE 1.2b
After its historic bull market, Microsoft’s price turned volatile and sidewaysbefore dropping half its value in April 2000.
6
A SHORT COURSE IN TECHNICAL TRADING
data, such as unemployment and the Consumer Price Index (CPI), but that’snot necessary and we won’t do it here. Besides, it’s not clear that using allthese facts will improve our profits.The techniques used in technical trading include trendlines, moving averages, chart patterns, and a few indicators based on simple mathematical formulas. None of it is complicated, but it takes practice to do it right.Some people call this systematic trading. The way to be sure that theindicators are done correctly is to enter them into a spreadsheet, or programthem into a software trading program that helps us get results quickly. Charting and pattern recognition remain special skills, but ones that are not verydifficult to master.
CHOOSING THE SYSTEMATIC WAYIt is not a choice between “which is better,” investing based on fundamentalsor technical trading. They are two very different methods chosen for completely different reasons.The fundamental investor may be looking for a cheap price or goodvalue on a piece of merchandise with the idea of holding it until it returns tovalue, or appreciates in value. You don’t want to overpay for real estate orstocks because it cuts into your returns.The systematic trader is foremost a trader. A trader doesn’t hold a position based on value, but decides whether the price is relatively too high ortoo low, whether it is in a long-term or short-term trend, extremely volatileor quiet. For each of these technical qualities, the systematic trader has aclear rule to follow. The rules are based on common sense and then testedusing historical data to be sure they actually work. We will learn how aspreadsheet or special computer program may be used to validate the rules.You will find that many of the rules that are based on charting methods havebeen handed down from one generation to another.
TECHNICAL TRADING AND VALUEA technical trader may also be influenced by fundamentals. A long-termtrend follower—one who buys a stock when the trend is rising—is reallytracking the increase in the value of the stock in an objective way. If Mrs.Hathaway was long Cinergy (a public utility) in 1997 based on a 100-day
Timing Is Everything
7
trend, she would be taking advantage of the Fed policy of lowering rateseven though the reason for rising prices might not be important to her, andshe may not have seen the close relationship between Cinergy’s stock priceand interest rates.The fast systematic trader could even profit if the stock or futures market were above value. He or she could be in a trade for a few hours or a fewdays. The value of a stock isn’t very important for a fast trader, only itsvolatility and short-term direction. Even when stocks were trending higher,as they were in 1997, the impact of the long-term trend on a one-day tradewas very small. You could buy or sell and still return a profit. Value, or fundamental information, is of minor importance for short-term traders.We choose systematic trading because• It provides discipline.• We can backtest (check the rules using historic prices) to see if thetrades would have been profitable.• We have confidence by knowing what results to expect both risk andreturn.• We can monitor current performance to decide if the method is stillworking as we expected.
USING A METHOD WE UNDERSTANDBy using trading rules based on prices, we are going to avoid some importantproblems. For example,• We don’t know how to find out if a stock is undervalued. In fact, we’renot sure that the experts can find the right value. We’ve found out thehard way that those who try to assess value may not have all the facts.• We don't need to watch a stock price drop by 90 percent before beingtold by an expert that its value has changed.• We are concerned that news, opinions of others, or just a bad day canchange the opinion of a fundamental or value trader.• We don’t know if using fundamentals can produce consistent profits.We will let the market tell us that prices are rising or falling and not relyon the advice of broker. A trend follower needs a Yogi Berra type of philosophy: “It’s not going up until it’s going up!”
8
A SHORT COURSE IN TECHNICAL TRADING
Basic Questions You Must Always AskWhether you’re managing your own personal money or you’re a professionalmoney manager, you need to ask the same questions: Which method of tradingis more consistent? Which one has more integrity? Which one can be influencedby outside factors? Which one can give you a fair assessment of expected returnsand risks? Which one is most likely to make money?
What’s the Downside to Technical Trading?Every method has its problems. To use systematic trading, you also need toknow what can go wrong.• You can’t find a method that works.• You may take a position opposite to what is being said on CNBC.• It may seem stupid to take another long position after just posting twolosses in a row.• It started working great, but now something’s gone wrong.• The risk is too high.Each one of these problems has a reasonable solution. The purpose of thiscourse is to show you some of the methods that are most likely to work, and
Why Technical Trading WorksLet’s be realistic. Not all trading systems work, but many systems do work. Thoseare the ones based on a sound premise. Once you understand how to follow therules, systematic trading works because• It identifies price trends and patterns objectively and applies clear rules.• It will profit from a fundamental or seasonal trend—if one exists.• It controls losses using stops.• It takes profits, based on predefined values.• It easily allows diversification.• It can be adjusted to personalized risk levels.• It is not affected by news or opinion.• It generates profits when continuously applied over time.
Timing Is Everything
9
help you get comfortable with their good and bad parts. If you can’t find asimple method that works, you won’t find a complicated one.
WHAT ARE THE OTHER GUYS DOING?Let’s take a few minutes to look at how man.y fundamental traders decide onwhat stock to buy, and when they will enter and exit the position.
How Do We Normally Decide to Buy a Stock?• We make a qualitative decision: Is it a good company?• Is it profitable? Has it paid dividends regularly? Is the stock rising? Doesit have a lot of debt? Is the P/E ratio high or low? In other words, is thecompany a good value?• Is the company healthy? Is it in good strong hands? Is the managementcompetent? Is there a large employee turnover? Are salaries reasonable?• Is the company likely to be competitive in the future?• Add to these concerns some new questions, such as: Does the CEO havea sensible exit package? Are there any accounting irregularities?All of these questions and answers are important. They try to reach the vitalareas that determine whether a company is sound and likely to remain thatway. The problem is whether you can get answers to these questions, andwhether those answers are reliable. Even when they appear to be answered,what is your level of confidence in a decision based on so many complexissues?
Reliability of InformationLet’s look at the most outrageous event of the past 10 years—the collapse ofEnron. Briefly, Enron was a powerhouse in energy trading. It had assets inthe form of a pipeline, and a large trading “book” in electricity. It was thoughtof as innovative and highly successful, a business model for the future. It wasa substantial component of the S&P.We see now that much of that was done with mirrors. It appears thatEnron had off-balance-sheet deals that were not reflected in their numbers,and the company was said to have generated artificial trades to make itappear that their trading volume was higher. Enron closed out trades beforeproducing its monthly risk report, and then reset them the next day. The
10
A SHORT COURSE IN TECHNICAL TRADING
company did everything it could to inflate the Enron stock price and withthe apparent blessing of their accountants. With the full benefit of hindsight,how reliable is the information that we use to base our value decisions?
Pro Forma Results—What Are They?Amazon.com has made an art of publishing pro forma company performance. What is that? It’s not the net earnings of the company, or its profitability. It’s a statement of “what company earnings would be if . . . ,” where“if” can be• If we didn’t need to write off a one-time loss due to a mistake in startinga new product• If we didn’t need to pay out debt that was obligated when we began thecompany• If we didn’t have to pay our employees a salaryThe problem is that pro forma results can be anything, as long as you explainwhat you’ve done. As remarkable as it seems, the stock price will rally aftergood pro form results—why would a pro forma report be anything but good?
What Happens When Public Confidence Changes?Returning to Enron, we need to remember how fast public confidenceeroded. In Figure 1.3 we see the stock quickly drop from $30 to nothing in thefinal days, but Enron prices had peaked a year earlier. Even before the offbalance-sheet transactions became public and problems became obvious,prices had declined from $90 to $60. What is most upsetting is that the majorbrokerage firms did not issue a sell signal until Enron was in the throws ofdeath, a decline of nearly 90 percent of the stock price.
How Would You Have Done?Look at Figure 1.3 again. During all of 2000 and the first part of 2001, Enronheld above $60, peaking at $90. In early 2001 it dropped from about $70 to$60, then to $50 within a few weeks. That was an unprecedented decline,leaving prices well off the highs by 40 percent. Traditional thinking declaresa bear market when prices decline 20 percent. At least we need to recognizethat something has changed. Why would the price drop 40 percent unlessthere was a problem?
Timing Is Everything
11
FIGURE 1.3
Was the fast collapse of Enron (ENE) the result of a sudden lack of confidence by the public or insider selling in excess of $1 billion? Did you care about the insiderselling before the collapse? Did you think about it when accounting irregularities were announced?
HOW DO YOU DECIDE THAT YOUSHOULD NO LONGER OWN THE STOCK?The decision to sell a stock is at least as important as the one to buy. Askyourself• What is the opposite of a buy decision when using only fundamentalinformation?• How long does it take to realize that the quality is no longer there?• How far down does a stock price need to fall from the highs before yousell?• One major retail broker waited until Cisco had declined 75 percentbefore taking it off their hold list. What would you have done?Do you remember that the public was told (on CNBC) that the majorhouses had shifted from a buy recommendation to a neutral when Enron hit$10? Let’s look at other examples to get an idea of some of the recent price
12
A SHORT COURSE IN TECHNICAL TRADING
FIGURE 1.4 Cisco’s clear bull market and subsequent dramatic drop is easy to see inhindsight, but would you have closed out your long position at 60 when you still had a 300percent profit in your original position?
patterns. If you were holding these stocks from 1997, consider whether youcould have made an objective decision to sell them before the major pricedrop. If you did not actually get out while you still had profits, then you needto learn some things about technical trading.
CiscoCisco (Figure 1.4) moved higher for three years, along with all of technology,with very little retracement. At the beginning of 2000 it dropped more thanone-third in two weeks, a sign that something had dramatically changed.Prices tried to rally, but by the third quarter of that year they began falling tonew lows. There was still a 300 percent profit in the original position. Wouldyou have gotten out?
General ElectricGeneral Electric (GE), the flagship of the Dow, had a steadier rise and a lessvolatile fall than Cisco (see Figure 1.5). You may have exited at $40, or even$45, as prices fell, and then regretted that decision when prices moved backover $50. General Electric certainly doesn’t look like Cisco, but a decline
Timing Is Everything
13
from $60 to $30 is an unnecessarily large loss to absorb when you easilycould have done better.
American AirlinesIt was not possible to be prepared for the price shock in American Airlinesthat came in mid-1998 (see Figure 1.6), when price turned from a perfect bullmarket to fall 35 percent in a few days. You might have been lucky when thesecond shock hit, at the beginning of 2000, because prices were already heading lower. You might even have escaped the third shock on September 11,2001, because prices were still looking weak. The first shock should havebeen a lesson in itself.
Amazon.comAmazon is a remarkable investment story. We all believe in the future of theInternet, and Amazon was up front taking advantage of that promise. However,expectations and profits are different, and Amazon has not been able todeliver quarterly profits. Instead, it feeds the hopes of the investors by releas-
FIGURE 1.5 General Electric (GE), the flagship of the Dow, is down one-third from it’shighs. Would you still be holding it? Would you have gotten out at $40 and then gotten back in at$50 because it looked as though it was heading back up? If not, where would you get in again?
14
A SHORT COURSE IN TECHNICAL TRADING
FIGURE 1.6 American Airlines is different from the other examples because of a seriesof price shocks. Would you have been on the correct side of the market? Would you be correctnext time?
FIGURE 1.7 Amazon.com lost $50 million each quarter yet continued higher through1999. It was the product of dreams. Fortunes were made and lost. Does the extreme volatilityin 1999 tell you anything?
Timing Is Everything
15
ing pro forma financial statements showing that profits are likely if everything goes according to projections. So far, that hasn’t happened. We arestill hoping.The volatility of Amazon (see Figure 1.7), much greater than many otherstocks, is based on overspeculation, constant promotion by the company,and a lack of any basis for valuing the stock price. How do you price thestock when the company posts a loss every quarter since inception?
IF YOU CAN’T HELP LOOKING AT THE CHART PATTERNSTHEN YOU’RE GOING TO BE A GOOD TECHNICAL TRADERIt’s fun to look at chart patterns