Book Review > Charting Secrets

The theme of this book is, "Stop Reading & Start Practising!" Louise will challenge and encourage you to put all the principles you learn from reading her book into practice. To do rather than just read.
The practical workbook format allows you to see how much you have internalized the principles before moving onto new concepts and ideas. It gives you opportunity to practice new skills in pattern recognition and working through real life examples.
Not only does Louise teach you the theory regarding various concepts, she also shows you what she does in her own trading.
Basically I found Louise's style of explaining how to interpret charts, easy to read and to understand. However, if you are new to charting and find any of her interpretations hard going, then you are able to skip that chapter or section and return to it later. You don't need to know a lot of complicated indicators to be a trader. It is best to become confident with two or three simple ones and move onto the more difficult ones later. Louise encourages you to practice with the two or three you do know, gain experience and return to those more difficult concepts once you have gained confidence.
One of the things I like about Louise, is her lack of ego. In explaining the momentum indicators she enlists the help of another trader, Chris Tate to help her explain the concept of "divergence". Chris is the author of "The Art of Trading" and uses momentum indicators very effectively in his own trading. One of the warnings Chris gives, is that if you use divergences that

"they are not the Holy Grail. They will not guarantee you success. The
only thing that guarantees survival and in turn, guarantees success is risk management".

Risk management is about limiting the size of your losses and protecting your capital. Louise covers risk management and money management throughout the book and more specifically in Chapter 10.
Another thing I liked in this book is the quick reference guide to identifying reversal patterns.
When you are new to candlesticks, it can be a bit confusing to remember all the reversal patterns and what they mean. Louise's guide makes it easy to look up the pattern, to discern the pattern implication and how you would trade it.
You might be thinking "Well, I am hardly a beginner; I am quite familiar with candlesticks and reversal patterns". Louise provides the experienced trader with advanced trading strategies, combining macro and candlestick reversal patterns.
Louise's style is like she is right there beside you. In an uncanny way it seems she knows exactly what you are thinking at that point in time and talks you through it.
Throughout the book the message is "discipline, discipline" and to act only when the weight of evidence suggests you are in tune with the market. Once we let our ego get in the road and try to predict the market we'll be in for a shock and this will show up in our bank balance (or lack of it). Louise suggests there is a fine line between courage and stupidity.
Louise will help you to round out your trading knowledge by giving you insight into candlesticks, system development, trading psychology, risk management and money management.

By reading through this book, working through the exercises and practicing what I was learning as I went, I found Louise helped me to consolidate my own technical analysis and gave me strategies that I could use in my trading. I would definitely recommend her book to you.

Kay Jones is a member of the AIA.