Candlesticks, Fibonacci, and Chart Pattern Trading Tools : a synergistic Strategy to Enhance Profits and Reduce Risk

RELIABILITY OF PHI-ELLIPSES RECONSIDERED
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trader has ever succeeded over a long period of time because Elliott’s
wave count is not stable. We admire Elliott for his work; his innovative
ideas enlightened us and provided the foundation for our own research.
With computer technology and our accumulated experience over the
past 20 years, we strongly believe that we have raised pattern recog-
nition to a higher level.
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6
M
ERGING
C
ANDLESTICKS
,
3-P
OINT
C
HART
P
ATTERNS
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AND
F
IBONACCI
T
OOLS
Can we improve the trading strategies based on candlestick chart pat-
terns, 3-point bar chart patterns, and geometrical Fibonacci trading
devices if we combine them? Can Fibonacci trading become even safer
and more prof itable? These are the key questions we consider in this
chapter.
Timing is the most crucial element in trading. It is important to
know what to buy, but it is even more important to know when to buy.
The candlesticks, 3-point bar chart patterns, and Fibonacci trading
tools described in the previous chapters can serve investors as prof-
itable stand-alone trading solutions. All trading signals result from
special interpretations of market price patterns. All geometrical Fi-
bonacci trading devices as well as candlestick patterns and 3-point
chart patterns are based on the core understanding of investor be-
havior expressed in peak and valley formations.
Working with our Fibonacci trading tools takes nothing more
than swing highs or lows and the Fibonacci ratio (or the ratios from
the PHI series). The greatest diff iculty for traders is choosing correct
swing highs or lows. On weekly price data, we cannot always apply Fi-
bonacci trading tools because there are insuff icient valid swings from
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