Ask Colin

Do you know of any books that explain the psychology behind chart patterns?

I don't know of any books that really come to grips with the underlying psychology of patterns. There are just scraps of comment here and there, though some seminars I have attended by David Fuller and Dan Gramza (candlesticks) have dealt with it rather better.

Most people look at the patterns superficially and don't really try to understand what causes them, which is the actions of people. I guess that if you are just looking to operate mechanically on patterns, that is OK, but I think you can have more confidence in patterns if you understand the psychology behind them. I will keep it in mind as a topic for future articles in Shares magazine perhaps.

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