back start next[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [ 34 ] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95] 34 The Static Numbers: 0.5.1.0,2.0I refer to these numbers as static because they are not as directly derived from the Fibonacci sequence as the other secondary numbers. These numbers are frequently found in stock charts. For example, a double top or double bottom pattem possesses two equal price legs. Another common example is the 50% retracement. Often, a stock will retrace half or 0.5 of a price move. But, this price action is easy to decipher. In fact, I believe technicians use these numbers more than the Fibonacci numbers.I have not included any examples of the static numbers, since the price legs are usually obvious to decipher. Although these numbers can help gauge price action, I do not feel that they are as harmonic as the other numbers. Therefore, I only use them to complement a potential set-up.Secondary Numbers SummaryThe secondary numbers are effective means of gauging market action. However, they should complement other primary numbers, and they are not as significant within a potential reversal zone. So, it is important just to be aware of these Fibonacci numbers, since they can define a harmonic area more clearly.Part IIIPatternsPatternsConsistently profitable investing can be achieved through the recognition of price pattems. Although it might seem unlikely, stocks do move in harmonic pattems that are very easy to identify. To identify these pattems, you must train your eyes to decipher such price movements.There are many theories regarding the nature of price action. Many theorists believe that the stock market is random. According to the Random Walk Theory, popularized in the book, The Random Character of Stock Market Prices, by Paul H. Cootner (ed.), published by MIT press, 1964, price action is "serially independent." This means that price history is not a reliable indicator of future price action. Although this theory does have some validity, since anything can happen in the stock market, history has proven that certain pattems do repeat. Therefore, it is important to study historical examples of such pattems for future opportunities.I suggest that you remove the pattem summary sheet included at the end of this book and post it in a place where you can often review it. You might want to post it next to your computer or the space that is dedicated for your trading. You might even want to make copies of the sheet and post it around your house! I am very serious about mentally reinforcing these pattems because it is essential to train your brain to perceive these set-ups.Initially, these pattems might be difficult to idenfify because you probably have never studied a stock chart fi-om this perspective. In a sense,[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [ 34 ] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95]