This gives a glimpse of the Pattern Recognition Method of The Responsible Trading System, which will be discussed in more details in my forthcoming book "The Responsible Trader."

1. The Responsible Trader Lessons
The Responsible Trader’s - POV
Module 4 – Reversal and Continuation Patterns
The Responsible Trader Lessons

2. The Responsible Trader Lessons
The Responsible Trader’s - POV
• The Responsible Trader's POV (Point of View).
• These are my notes, my own additional research and studies on the
Topic that I posted, and my personal observations and opinions that I
am sharing to further enhance our knowledge and understanding.
• Some of these were previously posted on “The Responsible Trader”
thread, Stock Market Pilipinas (www.stockmarketpilipinas.com). This
is the latest version of previous posts I made.
• Some of these plus further explanations and discussions will be
appearing in my forthcoming book “The Responsible Trader.”
The Responsible Trader Lessons

3. The Responsible Trader Lessons
Quick Review –What is the Proper Term for the Troughs and the Peaks in both
Uptrend and Downtrend?
The Peaks are called Resistance. It is the
opposite of Support and represents a price
level or area where selling pressure overcomes
buying pressure.
The Responsible Trader Lessons
The Troughs are called Support. This is a level or
area on the chart where buying Interest is
sufficiently strong to overcome selling pressure

4. The Responsible Trader Lessons
The Responsible Trader Lessons
Quick Review – What are the Degrees of a Trend?
1. Major trend – anything
over six months
2. Intermediate or
secondary trend – three
weeks to three months
3. Near term trend –
anything less than two
or three weeks.

5. The Responsible Trader Lessons
Quick Review –What is Role Reversal when we talk about Resistance and Support?
Role Reversal means Resistance turning to Support and vice versa.
Once a resistance or support level is broken, its role is reversed. If the price falls below a support level, that
level will become Resistance. If the price rises above a Resistance level, it will often become Support
The Responsible Trader Lessons

6. The Responsible Trader Lessons
Module 4 – Reversal and Continuation Patterns
• Collectively these are called Chart Patterns and this is where newbies
encounter a lot of difficulty when learning Technical Analysis.
• I will not discuss the lesson in the order presented on the Module.
Instead, I will try to add value by sharing my own inputs.
• Warning: What follows next are my own personal ideas and
observations.
• If you are not open to exploring new ideas with an open mind, you may
close the video and go back to your regular routine. Anyway, the Chart
Patterns have been discussed thoroughly in the MCTA Video.
• If you are open to exploring new ideas with an open mind, you may
proceed.
The Responsible Trader Lessons

7. The Responsible Trader Lessons
Module 4 – Reversal and Continuation Patterns
• This is a glimpse of the The Responsible Trading System - A system I
have developed myself. It is not the Holy Grail but it is a system that will
help you trade the market without fear and without greed.
• I will start first with the basics to make it easier for everyone to
understand.
• Think of Chart Patterns as consolidation. After consolidation, it could
result into a Trend Reversal or a Trend Continuation
• The key to learning Chart Patterns is not memorizing but RECOGNITION
and UNDERSTANDING. In this connection I would like to share with you
Pattern Recognition Method of the Responsible Trading System.
The Responsible Trader Lessons

8. The Responsible Trader Lessons
The Responsible Trader Lessons
Responsible Trading System - Pattern Recognition Method
RED FOR RESISTANCE
GREEN FOR SUPPORT

9. The Responsible Trader Lessons
The Responsible Trader Lessons
Bulls Attack and Bears Defenses
ACTIVE
NEUTRAL
PASSIVE

10. The Responsible Trader Lessons
NEUTRAL
The Responsible Trader Lessons
Bears Attack and Bulls Defenses
ACTIVE
PASSIVE

11. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Go to the next slide for the answers

12. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
Trend is Sideways or Flat
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Nobody. Neither of them is in Control
Rectangle, can either be a Reversal or Continuation Pattern

13. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Go to the next slide for the answers

14. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
Trend is Sideways not Flat but in Consolidation
Nobody. Neither of them is in Control
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Symmetrical Triangle, again can either be a Reversal or Continuation Pattern

15. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Go to the next slide for the answers

16. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
Trend is an Uptrend
Bulls are in Control.
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Ascending Triangle. Since this is in a Context of an Uptrend when it breaks
out is likely going to be a Continuation Pattern of the Uptrend.

17. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
2. Who is in Control? Bulls or Bears?
3. Draw the Bulls Line of Attack/Defense.
4. Draw the Bears Line of Attack/Defense.
5. What Chart Pattern do you see?
Go to the next slide for the answers

18. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Method - Application
1. What is the Trend?
Trend is a Downtrend
Bears are in Control
2. Who is in Control? Bulls or Bears?
3. Draw the Bears Line of Attack/Defense.
4. Draw the Bulls Line of Attack/Defense.
5. What Chart Pattern do you see?
Descending Triangle. Since this is in a Context of a Downtrend when it breaks
down is likely going to be a Continuation Pattern of the Downtrend.

19. The Responsible Trader Lessons
Pattern Recognition – Application to Head &Shoulders Pattern
The Responsible Trader Lessons
Trendline Break
Failure Swing
Neckline Support

20. The Responsible Trader Lessons
Pattern Recognition Practice
There are 5 Chart Patterns Here. Using the Pattern Recognition Method of The Responsible Trading System
can you name them?
The Responsible Trader Lessons
Go to the next slide for the answers

21. The Responsible Trader Lessons
The Responsible Trader Lessons
Pattern Recognition Practice - Answers
Ascending
Triangle
Head and
Shoulders
Descending
Triangle
Inverse Head
And Shoulders
Rising
Wedge

22. The Responsible Trader Lessons
Do you want to know more about Responsible Trading? Please visit, like and share:
a. My Blog: http://www.theresponsibletrader.com – where I write and share lessons on trading
and my thoughts about trading in particular and life in general
b. Facebook Page: https://www.facebook.com/theresponsibletrader – where I share what’s on
my mind and make posts to groups where I am a member of
c. YouTube Channel: https://www.youtube.com/theresponsibletrader – where you can view
and download my TRT-POV (The Responsible Trader’s Point of View) and other videos I intend
to make
d. My Slideshare: http://www.slideshare.net/TheResponsibleTrader – where you can view and
download copy of the Powerpoint Presentation of my TRT-POV (The Responsible Trader’s Point
of View) and other presentations I intend to make
The Responsible Trader Lessons