Trade What You See How To Profit from Pattern Recognition – Larry Pesavento, Leslie Jouflas

Trading the financial markets is extremely difficult, but with the right approach, traders can achieve success. Nobody knows this better than authors Larry Pesavento and Leslie Jouflas, both traders and educators of traders, who have consistently used pattern recognition to capture profits from the markets. In Trade What You See, Pesavento and Jouflas show traders how to identify patterns as they are developing and exactly where to place entry and exit orders. While some patterns derive from the techniques of Wall Street’s earliest traders and other patterns reflect Pesavento’s emphasis on the geometry of market movements and Fibonacci numbers.. Filled with hard-won knowledge gained through years of market experience, Trade What You Seeoutlines both a practical and sophisticated approach to trading that will be of interest to both novice and seasoned traders alike.

LARRY PESAVENTO IS A FORTY-YEAR VETERAN TRADER. HE OPERATES A WEB SITE,

Table of Contents

Foreword.

Preface.

Acknowledgments.

About the Authors.

PART ONE. INTRODUCTION TO TRADING WITH PATTERN RECOGNITION.

CHAPTER 1. OPENING THOUGHTS.

How to Use This Book.

Succeeding or Failing In Trading.

Steps to Take for Successful Trading.

CHAPTER 2. GEOMETRY OF THE PATTERNS AND FIBONACCI RATIOS. LARRY PESAVENTO, LESLIE JOUFLAS – TRADE WHAT YOU SEE HOW TO PROFIT FROM PATTERN RECOGNITION

History of Geometry in the Markets.

Fibonacci Ratios.

Applying the Fibonacci Ratios.

Summary.

CHAPTER 3. HARMONIC NUMBERS AND HOW TO USE THEM.

Where the Term Harmonic Numbers Originated.

Defining a Harmonic Number.

Vibrations in Price Swings. Larry Pesavento, Leslie Jouflas – Trade What You See How To Profit from Pattern Recognition

Repetition in Price Swings.

Finding Harmonic Numbers.

Harmonic Numbers Found in Other Markets.

PART TWO. THE PRICE PATTERNS AND HOW TO TRADE THEM.

CHAPTER 4. AB=CD PATTERN.

History of the AB=CD Pattern.

AB=CD Pattern Description.

AB=CD Pattern Structure.

Important Characteristics of the AB=CD Pattern.

C Leg Variations.

Slope and Time Frames.

Pattern Psychology.

Trading the AB=CD Pattern.

Market: S&P 500 E-MINI. Larry Pesavento, Leslie Jouflas – Trade What You See How To Profit from Pattern Recognition

# Contracts: 2.

Market: S&P500 E-MINI.

# Contracts: 2.

Market: Wal-Mart (WMT) Stock.

# Shares: 200.

CHAPTER 5. GARTLEY “222” PATTERN.

History of the Gartley “222” Pattern.

Pattern Description.

Pattern Structure.

Important Characteristics of the Gartley “222” Pattern.

Psychology of the Gartley “222” Pattern.

Trading the Gartley “222” Pattern.

Market: Soybeans.

# Contracts: 2.

Market: Google (GOOG) Stock.

# Shares: 200.

Market: S&P 500 E-Mini.

# Contracts: 2.

CHAPTER 6. THE BUTTERFLY PATTERN.

History of the Butterfly Pattern.

Pattern Description.

Pattern Structure.

Important Characteristics of the Butterfly Pattern.

Pattern Psychology.

Trading the Butterfly Pattern.

Market: Pfizer Stock (PFE).

#Shares: 200 (See Alternate Trade Management for using a three part scale out with the Butterfly pattern.).

Market: Crude Oil.

# Contracts: 2.

Market: Euro Futures.

# Contracts: 2.

CHAPTER 7. THE 3 DRIVE PATTERN.

History of the 3 Drive Pattern.

Pattern Description.

Pattern Structure.

Important Characteristics of the 3 Drive Pattern.

Psychology of the 3 Drive Pattern.

Trading the 3 Drive Pattern.

Market: QQQQ Daily.

# Shares: 200.

Market: SP EMINI DAILY CHART.

# Contracts: 3.

Market: Gold Futures.

# Contracts: 2.

CHAPTER 8. RETRACEMENT ENTRIES AND MULTIPLE TIME FRAMES.

Fibonacci Retracement Entries.

Pattern Structure.

Trading the Fibonacci Retracement Pattern.

Market: INTC.

# Shares: 200.

Market: QQQQ.

# Shares: 200.

Market: SP Emini.

# Contract: 2.

Opening Price Retracement Setups.

Market Setup for the Opening Price Retracement Trade.

Trading the Opening Price Retracement Setup.

Stock: CTX.

# Shares: 200.

Stock: GS.

# Shares: 200.

Stock: AA.

# Shares: 200.

Multiple Time Frames.

CHAPTER 9. CLASSICAL TECHNICAL ANALYSIS PATTERNS.

A Brief History of Technical Analysis.

Basics of Technical Analysis.

The Double Bottom and Double Top Pattern.

Double Top Pattern.

Head and Shoulders Pattern.

CHAPTER 10. LEARNING TO RECOGNIZE TREND DAYS.

Identifying a Trend Day.

Patterns Found on Trend Days.

AB=CD Pattern on a Trend Day.

Trend Day Consolidation Pattern.

Fibonacci Ratios on Trend Days.

Controlling Risk on a Trend Day.

Example of Trading a Trend Day.

Market: SP Emini.

Contracts: 2.

PART THREE. ESSENTIAL ELEMENTS OF TRADING.

CHAPTER 11. TRADE MANAGEMENT.

Thinking in Probabilities.

Warning Signs and Confirmation Signs.

Money Management.

CHAPTER 12: USING OPTIONS WITH THE FIBONACCI RATIOS AND PATTERNS.

Definition of a Call and Put Option.

Factors That Influence the Price of Options.

Controlling Risk with Options.

Examples of Using Options with Extension Patterns.

CHAPTER 13. BUILDING A TRADING PLAN.

Trading Plan.

Trading As a Business.

Disaster Plans.

Summary.

CHAPTER 14. DAILY ROUTINES.

Trade Preparation.

Mental Preparation.

Physical Health Preparation

Appendix A. Useful Resources.

Technical Books.

Motivational Books.

Interviews with Traders.

Trading Psychology Books.

Trading Magazines.

Software Sources with Fibonacci Tools.

Trading Related Websites.

Index.

AUTHOR INFORMATION

LARRY PESAVENTO is a forty-year veteran trader who has one of the most extensive trading libraries in the world. He operates a Web site, www.tradingtutor.com, which provides market analysis for subscribers. Pesavento speaks regularly at trading conferences and is a private trader for a large hedge fund. The pattern recognition approach he uses eliminates the random nature of market action.

LESLIE JOUFLAS has been trading for over ten years and went professional in 2000. She coaches and tutors trading students as well as moderates and runs www.tradingliveonline.com. Jouflas also trades privately managed money as well as her own account.

REVIEWS

“…should prove valuable to those already practicing technical analysis and who want to take their trading to the next level.” (Investors Chronicle, Friday 28th March 2008)