This is the training manual for Live Traders' chart-reading course: a big catalog of named candle patterns paired with a genuinely disciplined risk framework. The patterns are unverifiable opinion; the risk rules are the one part worth stealing.
The one idea
The book's method is: find a higher-timeframe trend (a stock in what it calls a Stage 2 uptrend or Stage 4 downtrend), then drop to a lower timeframe to find one of roughly a dozen named entry patterns (Buy Set-Up, Breakout, 3 Bar Play, Bull Flag, Parabolic reversal, and so on), enter with a tight technical stop, and size the position off a fixed dollar risk rather than a fixed share count.
Underneath the pattern catalog sits a real risk system. Every trade is measured in 'R' (the dollar amount risked on that trade), new traders are told to risk $10 to $30 per trade regardless of account size, and the book lays out hard stop points: 3R lost in a day, 9R in a week, 12R in a month, each one a mandatory shutdown. That structure, not the chart patterns, is the actual contribution.
The rest of the book is trade management: once you're in a winning trade, it walks through seven distinct ways to protect or extend the gain (All-or-Nothing targets, Bar-by-Bar trailing, Pivot trailing, moving-average trailing, adding to winners, selling into strength, and hybrids of these), with the explicit point that no single style is best and the trader has to pick one they can actually follow every day.
What it actually teaches
The book's approach runs top-down, from bias to entry to sizing to management:
SET A HIGHER-TIMEFRAME BIAS
Identify a stock in a clear Stage 2 uptrend (or Stage 4 downtrend), or coming off a double-bottom/double-top transition. No pattern below is traded without this bias in place first.
DRILL DOWN TO AN ENTRY PATTERN
On a lower timeframe, look for one of the book's named setups. A Buy Set-Up needs 2 or more lower highs and a pullback with less than 50 percent overlap on any bar, ideally at a 45-degree retracement angle. A Breakout needs a tight, clean base near the 9 or 21 EMA, decreased volume mid-base, and 3 to 5 times normal volume on the entry bar. A 3 Bar Play needs an igniting bar double the size of the average bar, followed by two bars with relatively equal highs in the upper 50 percent of bar one's range.
SIZE THE TRADE OFF A FIXED RISK, NOT A FIXED SHARE COUNT
Position size is Entry minus Stop, divided into a dollar risk target. The book's own example: buy at $50.00, stop at $49.50, risk $500, size comes out to 1,000 shares. New traders are capped at $10 to $30 risked per trade; experienced traders are told to stay under 1 percent of account equity, and under 0.5 percent for intraday accounts because of buying-power limits.
PICK ONE TRADE MANAGEMENT STYLE AND STICK TO IT
Choose from All-or-Nothing (set a target, walk away), Bar-by-Bar (trail the stop under the prior bar's low, giving 5 to 10 cents of room), Pivot (trail below the most recent swing low, requires patience since it gives back more on reversals), or a moving-average trail (the book's preference is the 9EMA, trailed at least 15 percent behind it). The book is explicit that the choice matters less than following it consistently.
ENFORCE HARD LOSS LIMITS AT THREE HORIZONS
Stop trading for the day at 3R down, for the week at 9R down, for the month at 12R down. After a 12R month, trade half-size for the first week back and only return to full risk after recovering 5R; a worse result means booking a coaching session.
What it looks like Monday morning
A reader who takes this book seriously on Monday morning does not start hunting for 3 Bar Plays. They write down a fixed dollar risk per trade (the book says $10 to $30 while learning), define what a 3R daily stop-out looks like in dollars, and put a hard rule in place to walk away from the screen when they hit it. That's the transferable piece: a pre-committed, R-denominated loss ladder that doesn't bend mid-session.
The chart patterns themselves need a second step the book does not provide: the reader has to backtest them on their own instruments before trusting them with money, because the book supplies no win rate, no sample size, and no out-of-sample test for a single pattern in the catalog.
| Horizon | Max cumulative loss | Required action |
|---|---|---|
| Day | 3R | Stop trading for the rest of the day and reassess |
| Week | 9R | Stop trading for the rest of the week and reassess |
| Month | 12R | Stop trading real money for the rest of the month; trade half-size the first week back, resume full risk only after recovering 5R |
R is whatever fixed dollar amount the trader risks per trade, so the ladder scales with account size but the trigger points (3, 9, 12) are fixed by the book regardless of account.
The Holy Grail is the method you can follow consistently. Nothing more, and nothing less.Jared Wesley, Professional Trading Strategies
Where it fails
- Every pattern is illustrated with a winner, never a loser. The Essential Patterns and Gaps chapters run for roughly 170 pages of annotated charts, and every single one shows the setup working. There is no side-by-side failed 3 Bar Play, no failed Breakout, no failed Level 1 Gap. A reader has no way to see from the book alone what the pattern looks like when it doesn't work, which is exactly the information needed to judge whether the reward-to-risk claims are honest.
- The one hard statistic in the book is an anecdote, not a backtest. On re-entering full stop-outs, the book states it 'will work 84% of the time from my personal experience' and then tells the reader to back-test 100 to 200 trades themselves because 'you might find your statistics differ from mine.' That is the author admitting his own number isn't verified, buried in the trade management chapter rather than flagged as a caveat up front.
- Pattern definitions lean on words that can't be measured. Breakout criteria include being 'near' the 9 or 21 EMA (defined loosely as within 70 percent of the distance, not a fixed number), a base that is 'tight, clean, not sloppy,' and a wide range bar meaning 'roughly double' an average bar with no stated lookback period. None of this can be coded into a scanner or tested mechanically; two traders reading the same chart can reasonably disagree on whether a setup qualifies.
- It assumes infrastructure and capital the book never helps you get. The Psychology chapter lists 'lack proper charting software, fast internet connection, old slow computer' and 'not enough operating capital' as top reasons traders fail, and the Order Entry chapter assumes working knowledge of Level II and ECN routing to get filled on breakouts. The book names these as prerequisites but doesn't teach Level II reading or recommend specific tools, so a reader without that setup already can't execute the patterns as described.
- No mention of the Pattern Day Trader rule or account minimums. The share sizes in the worked examples (500 to 2,000 shares per trade, sometimes with adds) imply an account large enough to clear the US $25,000 equity minimum required to day trade freely, plus margin. The book never states this requirement anywhere in the money management or business-of-trading chapters, leaving a reader with a smaller account to discover the constraint on their own after they've already tried to trade the strategies as written.
Who it is for
Buy it if
You already have a funded, PDT-compliant trading account and screen time, and you want a second opinion on money and trade management discipline specifically: the R-based sizing, the 3R/9R/12R shutdown ladder, and the honest discussion of trade management as a personality fit rather than a search for a 'best' method.
Skip it if
You're looking for a validated, backtested edge, or you're a small-account or part-time trader without Level II access and real-time scanning tools. The pattern catalog is presented with total confidence but zero statistical backing, and the infrastructure it assumes you already own is never addressed.
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