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About this book
Technical analysis for the financial trading and investment has nearly several hundred years of history. Traders use the technical analysis to collect the scientific evidence to find out the probable market direction and volatility for their trading. When many people spot the same thing in the financial market, I think we should take it very carefully, especially if they are based on the scientific evidence. Price action and pattern trading strategies were extensively used by many successful traders to identify the trading opportunity to profits in the market. Price action and pattern trading strategies concern less on the traditional technical indicators. However, they concern more on raw price patterns. With the recent development of many brilliant trading strategies within the price action and pattern trading, their usefulness are already beyond the expectation of many of us.
As a quantitative developer and trader, my job allows me to explore nearly thousands of different trading strategies to validate and verify. Several price action and pattern trading strategies have shown me that their operating characteristics are much different from the typical momentum and mean reversion strategies. Those price action and pattern trading strategies are powerful. However, the idea behind these powerful trading strategies is poorly understood by many traders. Therefore, I decided to come up with the new concept “Equilibrium Fractal-Wave process” because I was not able to encapsulate many proven trading strategies used by traders last 85 year using the existing theory.
To accomplish the concept “Equilibrium Fractal-Wave process”, I had to create more comprehensive Price Pattern Table to explain those price action and pattern trading strategies outside the trend and seasonality framework, which are the backbone of the analysis techniques for univariate price series. The main purpose is to communicate with traders for the potential market dynamics for their profitable trading by spotting the existing phenomenon in the financial market.
This book is still geared up for your practical trading. Therefore, just explaining why the strategies work is probably not sufficient for traders. This book covers many working price action and pattern trading strategies in details and with examples. At the end of this book, we have also provided some useful information towards your trading management. Especially we emphasize the importance of the risk management in this book. I tried to offer the digestible information as much as I can even for average traders. In addition, many free tools are available from the website: “http://algotrading-investment.com” for free of charge. Especially, you might need the Peak Trough Analysis tool to follow some of the chapters in this book. You can freely download the Peak Trough Analysis tool from the same website above. Finally, reader should note that this book contains some strong technical language.