Getting Started in Chart Patterns

Lately, I’ve been focused on improving my skills as an investor and trader. While the past year was one of my best, I still underperformed compared to the broader market—meaning I didn’t make the most of the opportunities available. Some of my biggest mistakes included failing to set stop losses after dividend payouts, only to watch those stocks drop and leave me with unnecessary losses. I also lacked a solid exit strategy, often holding onto trades far longer than I should have.

Bulkowski’s Getting Started in Chart Patterns is all about technical analysis—a subject that’s often ridiculed, yet remains widely used. The reality is that human minds are wired to recognize patterns, and when thousands or even millions of traders are looking for the same signals, these patterns can influence market behavior. Bulkowski takes a statistical approach to analyzing popular chart patterns, explaining not just their structure but also how to use them effectively.

One of the most valuable takeaways for me was his method for calculating stop losses based on historical price variability. This approach helps place stop losses in a way that minimizes potential losses while avoiding being prematurely stopped out by normal market fluctuations. He also reinforced an important mindset shift: even if a single trade goes against me, there will always be another opportunity. The key is risk management—ensuring I have the capital to keep trading and investing.

Thanks to these insights, I’ve already exited most of my failing positions, keeping only the one that still shows potential. The capital I freed up has already started generating new profits.

For anyone looking to improve their technical trading skills with a data-driven approach, Getting Started in Chart Patterns is a solid resource that goes beyond theory and into practical application.