Authorised and Regulated:
Middle East & Africa
United Kingdom
Asia Pacific

Chart Patterns Trading: A Book Review

  • One of the most underrated chart patterns books
  • Learn how to manage winning and failed chart patterns
  • Great for beginners and experts
    chart patterns book review
    Chief Economist
    Sep 2, 2022, 8:13 AM

    Chart Patterns Decoded

    Plenty of free resources about chart patterns exist on the internet. What could one more book on chart patterns offer? Well, when it comes to "Trading Stocks Using Classical Chart Patterns", by Brian B. Kim, the answer is quite a lot actually. Believe it or not, as the book’s subtitle states, it has something to offer both the beginner, and experienced traders like myself. Don’t let the word “stocks” in the title deter you, the little nuggets of gold you get from reading this book apply to any tradable market, including forex. Whilst I would stop short of saying Kim’s book is the best I’ve ever come across in terms of classical chart patterns, it certainly has to be one of the most underrated. Priced at just £7.97 on the UK Amazon Kindle store, “Trading Stocks Using Classical Chart Patterns” is definitely good value for money.

    Classical Chart Patterns

    Information From an Expert

    Kim, right from the beginning, proves he is an experienced trader with abundant references to the importance of risk management. “What is most important, and what is not debatable, is managing our risk and limiting our losses”, says Kim in the first chapter. “Preserving my trading capital, not making money, is my first and only goal as a trader”. Those opening words could only be written by someone, who like most consistently profitable traders, have had to learn such lessons the hard way. I also found his honesty about chart patterns refreshing. He openly recognises that even perfect looking chart patterns will fail most of the time. Keeping failure and risk management constantly in the back of the reader’s mind, Kim proceeds to walk the reader through the theory and application of the core classical chart patterns.

    Chart Pattern Devotion

    The best aspect of the book is the sole devotion to the subject of classical chart patterns. Far too often, trading books veer off subject, be it about candlestick patterns or volume analysis. Kim, instead, devotes page space to the core classical chart patterns that matter. Head & Shoulders, Rectangle, Triangles, Pennants, Wedges, Flags, Channels, Double Tops and Bottoms, Horns and Diamonds are all covered. By staying on topic, Kim is able to devote more page space to real world scenarios with emphasis on market context. How to handle failed chart patterns, patterns within a pattern, and how to deal with both take profit, limit and stop orders sections provide particularly good insight. Furthermore, the author gives a unique glimpse into how he manages covering many markets. Practical advice rarely found in a book.

    Handy Titbits for Experts

    After reading Trading Stocks Using Classical Chart Patterns, I found myself picking up new tidbits of information along the way. For example, on my first read I learned about the last day rule concept in relation to candlestick patterns. Basically, the rule states that for short trades, a trader should place their stop loss just above the high of the last day in which prices trades above the break-out boundary. For long traders, the trader should put their stop just below the low of the last day in which prices trades below the breakout boundary. In addition, Kim gives his own modified approach, when required, to the last day rule. My second read unearthed even more valuable advice and tips. So, the book really does have something to offer experienced traders.  

    Beginners Stand to Gain

    Less experienced traders, meanwhile stand to gain a better understanding of the context and application of chart patterns that most free resources will ever provide. Sites like BabyPips and Investopedia are great free resources, but they can’t compare in terms of the detail and concepts provided by the book. After reading Kim’s chart pattern explanations and practical examples, novice traders are guaranteed to walk away with a better holistic understanding of how chart patterns work. Moreover, Trading Stocks Using Classical Chart Patterns makes the perfect desktop reference book when conducting your own chart analysis for a much lower price than similar educational resources.

    The Right Chart Pattern Platform

    Whether you are learning chart pattern analysis or ready to trade chart patterns, the VARIANSE cTrader platform has got you covered. A demo or live VARIANSE cTrader account allows you to save up to 50 chart templates and to have as many charts on screen simultaneously as possible. Likewise, when you open a cTrader demo or live account, you benefit from chart time frames from one minute all the way up to one month with true ECN market pricing. But don’t take my word for it, come and test for yourself why VARIANSE cTrader is one of the best platforms for chart pattern traders.  

    DISCLAIMER: All communication, messages, media and links distributed on this channel has been prepared by VARIANSE solely for information purposes without regard to any particular user’s investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but VARIANSE does not represent that it is accurate or complete. VARIANSE does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice. The information provided herein is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sales of any financial instrument. The information contained herein has no regard to the specific investment objects, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment decision. It is important to note that past performance is not indicative of future results. VARIANSE is a trading name of VDX Derivatives, authorised and regulated by the Financial Services Commission (FSC) of Mauritius. FSC license number C118023323. VARIANSE is also a trading name of VDX Limited and is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom. FCA register number 802012. This publication is not directed to residents of the United States and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

    Your global trading connection

    We are an award-winning, internationally regulated, trusted and secure broker.

    Regulated Globally

    VARIANSE is authorised and trusted internationally. We have entities regulated by the FCA, FSC and LFSA.

    Multi-Award Winning

    VARIANSE has achieved consistent recognition from independent organisations and the financial community.

    Premium Customer Support

    Take comfort in an experienced team committed to providing you with rapid, efficient, and friendly support.

    Tier-1 Banking Relationships

    We safeguard your funds safely and securely in segregated ring-fenced client money custodian bank accounts with Barclays Bank.

    RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
    VARIANSE is a trading name independently operated by the following regulated entities:
    Copyright © 2015-2024. VARIANSE and VDX are registered trademarks. All trademarks, logos and brand names are the property of their respective owners.
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.