Page 147 - THE MARKET WHISPERER

THE MARKET WHISPERER 14 5

Summary
Patterns are mirrors that reflect the war between buyers and sellers.
Patterns help predict the outcomes of this war and allow the trader to
choose the winning side.

Try to examine each pattern, and imagine the war. Once you’ve learned
these patterns, your next move is to join the real game. Open a volatile
stock price chart, such as that of AAPL, and try to guess, in real time,
according to patterns of five-minute candles, what the stock’s next step
could conceivably be. I believe you’ll be presently surprised by your ability
to predict the pattern.

Homework
Below is a day of trading in AAPL stock, represented in five-minute

candles. Name each of the patterns marked on the chart:

It’s not so very difficult, right? So what’s the problem? You can make
millions this way! But… unfortunately, it’s not quite that simple. The
question is not only whether you can identify pattern reversal, but how
long that reversal will last. For example: if you correctly identify the
reversal pattern [1] and execute a short there but do not turn a fast profit,
you will find yourself losing when the stock reverses direction toward [2].
Identifying the pattern is the basis, but it is not the entire picture. Later

we will also learn that the pattern must be integrating in the stock’s trend.