7 Chart Patterns That Consistently Make Money” by Ed Downs is a concise trading guide (first published in 2000) that identifies seven key technical chart patterns traders can use to predict market direction and improve entry/exit timing. It’s widely regarded as a practical resource for investors who rely on technical analysis.

About the Book

• Author: Ed Downs, CEO and founder of OmniTrader (Nirvana Systems).
• Publication Year: 2000.
• Length: 87 pages.
• Focus: Technical analysis and chart patterns for trading stocks, futures, and other markets.
• Core Idea: After 20+ years of market study, Downs distilled trading into 7 reliable chart patterns that consistently signal profitable opportunities.

Key Concepts

• Chart Patterns as Predictors: Downs argues that the most successful traders rely almost exclusively on chart patterns because they reflect consistent human behavior in markets.
• Profit & Risk Management: The book emphasizes using these patterns to maximize profit-taking and minimize losses.
• Universal Application: The patterns are presented as effective across different markets (stocks, commodities, forex).

The Seven Patterns (General Overview)

While the book itself provides detailed explanations, the commonly referenced patterns include:

1. Support & Resistance – Identifying price levels where markets consistently reverse.
2. Breakouts – Recognizing when price moves beyond established ranges.
3. Triangles (Ascending/Descending/Symmetrical) – Patterns signaling continuation or reversal.
4. Head and Shoulders – A classic reversal indicator.
5. Double Tops & Bottoms – Strong reversal signals.
6. Flags & Pennants – Short-term continuation patterns.
7. Wedges – Indicating potential trend reversals.

(Note: The exact seven patterns are explained in the book with examples and trading strategies.)

Why It Matters

• Practical Guide: Unlike encyclopedic references, Downs’ booklet is short, focused, and designed for traders who want actionable strategies.
• Behavioral Insight: Patterns form because traders react to price movements in predictable ways (fear, greed, herd mentality).
• Legacy: The book remains popular among traders learning technical analysis basics.

Risks & Considerations

• Not Foolproof: Chart patterns increase probability of success but don’t guarantee profits.
• Market Context Matters: Patterns must be confirmed with volume, trend strength, and other indicators.
• Discipline Required: Success depends on consistent application and risk management.