There are many great books on "charting" and "technical analysis." There are more books than you can probably read in your lifetime. But here's the truth: the books are 90 percent the same. A book that discusses the basics of charting will cover the basics. An advanced book is more of the same with a little more intensity, formulas, examples, and impressive language (for the average person). How do you choose the right book? Get a couple of books in the mid price range and walk away happy.

Of course, if you are a technically minded person, you will enjoy the books that require an IQ of 155 to understand. If you are not technically minded, you need to find books that use language that fits your comfort level, or stretches your mind a little.

What chart patterns are most important? Here are some popular patterns to consider for future evaluation.

"W" and "M" Patterns
The "M" pattern is similar to the "Double Tops" pattern. Where you have a stock that has reached a high point twice, and in between there is a dip forming a "V" shape. The "M" pattern is fully developed when the second leg of the "M" reaches the low point of the "V" dip. The time to make the play is when there is "CONFIRMATION" by the stock continuing the down trend past the "M" pattern.

Trends
Don't fight the trend because there is too much risk of potential loss. It is important to understand that the TREND is relative to different periods of time. For example, a stock may have a general up trend when looking at a 20 year chart, where each bar of the chart is one year of movement. However, when looking at a monthly chart the trend for the last 14 months has been down. You need to stay in the relative framework of the time period you are playing. If you plan to get in and out of a play in a few hours, you will need to use 5-minute, and 60 minute trends. If you also look at the daily trend and all three (5 min, 60 min, daily) are all moving the same way, you have a strong pattern. If you plan to get in and out of a play within the next 20 minutes, you would look at the tick, 1 minute, and 5 minute charts. You might also look at the 1 hour chart for added clarity.

Entrance and Exits
Many people like to play stocks that have just bounced off of support or resistance. It's potentially the most logical time to start a play, because there is a habit on your side, as in the normal up and down movement of the stock. Guess what happens? They become great traders and their frustration is changed into excitement and confidence.

When you take the time to look for perfect entrance and exits, you put the law of averages to work for you and profits are the result. Almost everyday there are plenty of stocks bouncing off of support and resistance, all you have to do is pick the best ones, and let the stock market do the rest. When a stock is bouncing off of SUPPORT it's time to do UP plays, when stocks bounce off of RESISTANCE it's time for DOWN plays.