Patterns reflect behavior, help prepare us for market developments

Price activity is the result of human behavior. People do not randomly buy or sell in the market. The decision to buy or sell may be carefully considered, it may be a poor decision, or it may be an action later regretted. In all cases the decision contains an element of emotion and this emotional behavior is reflected in the movement of prices.

The result, in some cases, is the development of a range of patterns of price behavior. These are chart patterns and they define the ebb and flow of human emotion as effectively as a cardiogram beside a hospital bed.