The reader's first impression might be that Schabacker's classification of chart patterns borders on overkill. In addition to all the well-known chart formations, the author identifies seven different types of triangles and splits hairs describing a common turn vs. a rounding turn. Still, the description of each pattern is quite complete, including accompanying volume characteristics to look for. By studying the numerous chart examples, all from the 1930s, it is easy to appreciate how little the markets have changed over the last 65 years. After running through all the major and minor chart formations, the course moves to trendline use, gaps and the study of support and resistance levels.
Triangles are the formations most prone to false breakouts.
The best defense consists of paying close attention to volume. However, instances of shakeouts on high volume also are dealt with. This chapter might actually be the most useful for an experienced chartist. Any student looking for a novel new approach to trading tactics will be disappointed. Schabacker espouses the time-tested techniques of charting the markets by hand, studying the price movements, drawing trendlines and exercising patience.