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

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S
OME
F
INAL
R
EMARKS
Our aim with this book has been to present easy, reliable trading de-
vices that investors can combine with the trading rules and apply in
real-time trading to improve their absolute return.
The weak performance by all of the so-called experts suggests
that traders may do better if they manage their money themselves. Is
it possible to develop absolute return strategies that result in portfo-
lio profits by the end of every month, or at least by the end of every six
months?
To have absolute return in a portfolio, the trading concept must
implement some basic ideas:
• A systematic trading approach tested on historical data either
with a computer or by hand.
• Five to ten products in a portfolio, analyzed by the same approach
(a few products less might be suff icient on intraday portfolios).
• Long and short signals allowed.
• Stop-loss protection, profit targets, and /or trailing stops on every
position.
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SOME FINAL REMARKS
We hope that reading this book has helped interested readers use
the preceding criteria to f ind their preferred trading strategies.
For many decades, books, market letters, and other sources of in-
formation have been presenting investment strategies. We tried to se-
lect Fibonacci trading tools, candlestick chart patterns, and regular
3-point price patterns that are prof itable when used alone—and even
more prof itable in combination. Combining different strategies cor-
rectly can improve the chances of success for investors in different
market conditions.
No matter how good a trading approach is, a trader who does not
know how to execute it will never be successful. We started the book
with some basic principles of trading psychology and investor behav-
ior. These are the factors that can lead to bad decisions in trading even
though they have nothing to do with the trading strategy itself:
• Put your ego aside.
• Hoping and praying do not help.
• Living with losses has to be learned.
• Never double your losses.
• Know your pain level.
• Diversify risk.
• Making money with trading is hard work.
• Recognize the importance of a trading plan.
• Nothing is more important than discipline.
In Chapter 2, we referred to the magic f igure three. If a trader
believes as much in pattern recognition as we do, the key question is
whether all the trading concepts behind Fibonacci trading tools, can-
dlesticks, and regular chart patterns have a common denominator.
Concentrating on the f igure three is all that it takes to be success-
ful, as long as these patterns are executed correctly and are com-
bined with a stop-loss and prof it target. How to do this is the subject
of this book.
In Chapter 3, we introduced Fibonacci-related trading strategies,
selected candlestick chart patterns, and a selection of regular 3-point
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