PATTERN RECOGNITION AND TRADING DECISIONS

To make money in the markets, you need to buy low and sell high, or sell
high and buy low. This book is designed to help people do that in a way
that is consistent with their preferences and abilities.

Each and every individual is endowed with a unique set of life experiences,
preferences, principles, and needs. An observant homemaker might
become knowledgeable on supermarkets; a geologist on oil exploration
companies; a nurse on health care companies, and a pilot on airlines—and
so the list goes on. Some people might prefer to invest for the long term, and
others the short; some may be approaching retirement and be risk averse,
whereas others, with their lives ahead of them, could take the view that they
can afford to fail since they are young enough to start again. It follows that
no single approach to exploiting the markets can simultaneously allow all
individuals to utilize their unique expertise, accommodate their temperaments,
principles, and preferences, and suit their financial circumstances—
but an overview of available decision techniques and discussion of the
issues should help them to formulate and achieve their goals or at the very
least, do better than they would have without it.

Literature on exploiting financial markets tends to be both specialized
and diffuse.
Many good books have been written on the markets, and
I have a number of personal favorites among them—but for a new investor
wanting to acquire an overview of market decision techniques, there is the
problem of having to absorb the contents of many books, written in many
styles, without such an overview in mind.
The principal subject clusters in
market literature are types of tradable instruments, psychology, fundamental
analysis, and technical analysis.




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