Describe patterns and test the conclusion
See this course’s project requirements
A fictional stock-literacy file with a quote card, checked order and gap cases, an accessible OHLC chart, a pattern counterexample and a reconciled paper-trade ledger.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- A quote card with exact symbol, historical last price, best bid, best ask, spread, visible sizes and simulation limitations.
- An order comparison showing executed quantity, unfilled quantity, gross cost, weighted fill price, fee and total cash cost.
- A two-column gap comparison with trigger, resulting instruction, fill status, executed price, net cash and unsold shares.
- An annotated original candle chart, exact matching data table and period-3 range/body/wick calculation.
- A pattern note with numerical definitions, $49 three-period average, opposing continuations and a failed observed-support band.
- A complete fictional stock-literacy file with quote card, order/gap comparisons, accessible OHLC chart, pattern counterexample and reconciled two-order ledger.
Review and revise
Use these criteria to check your work and choose what to improve.
- Quote, order and ledger records use the exact supplied inputs, distinguish submitted/pending/filled states and reconcile all executed quantities.
- Money calculations show units, fees and intermediate steps; cash and shares agree with an independent calculation.
- The original chart has a matching table and labels; pattern notes retain contrary evidence and distinguish historical observations from forecasts.
- All six lesson outputs and changed-input results are included, with fictional assumptions and untested real-world behavior stated accurately.
Want more background?
The idea in everyday life
All six daily periods are invented. Each row records the open, highest, lowest and closing transaction price plus shares traded during that period. They are historical measurements, not executable quotes. A chart point or candle never supplies a guaranteed price for a later order. No dividends, split adjustment, fees or cash movements are included. For this exercise, doji means exactly equal open and close; other charting conventions may use a small-body tolerance. Period 5 has O=$50, H=$51, L=$49 and C=$50. Two deliberately invented possible next days use this same prefix: A has O=50,H=52,L=49.5,C=51; B has O=50,H=50.5,L=46,C=47. These are counterexamples, not sampled probabilities. In a separate body-containment case, candle A has O=51,H=52,L=48,C=49; candle B has O=48.5,H=52,L=48,C=51.5.
A pattern is a description of selected history. Naming a shape or averaging prices does not prove the next move or an investment’s value.
Describe patterns and test the conclusion — worked paper practice
A pattern is a description of selected history. Naming a shape or averaging prices does not prove the next move or an investment’s value.
All six daily periods are invented. Each row records the open, highest, lowest and closing transaction price plus shares traded during that period. They are historical measurements, not executable quotes. A chart point or candle never supplies a guaranteed price for a later order. No dividends, split adjustment, fees or cash movements are included. For this exercise, doji means exactly equal open and close; other charting conventions may use a small-body tolerance. Period 5 has O=$50, H=$51, L=$49 and C=$50. Two deliberately invented possible next days use this same prefix: A has O=50,H=52,L=49.5,C=51; B has O=50,H=50.5,L=46,C=47. These are counterexamples, not sampled probabilities. In a separate body-containment case, candle A has O=51,H=52,L=48,C=49; candle B has O=48.5,H=52,L=48,C=51.5.
PINE-PRACTICE invented daily history
Paste at A1.
| APeriod | BOpen ($) | CHigh ($) | DLow ($) | EClose ($) | FVolume (shares) |
|---|---|---|---|---|---|
| 1 | 50 | 52 | 49 | 51 | 1000 |
| 2 | 51 | 53 | 50 | 52 | 1400 |
| 3 | 52 | 52.5 | 48 | 49 | 2200 |
| 4 | 49 | 51 | 48.5 | 50 | 1300 |
| 5 | 50 | 51 | 49 | 50 | 1200 |
| 6 | 49 | 50 | 46 | 47 | 2500 |
Copy as plain text
Same prior doji, different possible next days
Paste at A1.
| AInvented case | BOpen | CHigh | DLow | EClose |
|---|---|---|---|---|
| Shared prior doji | 50 | 51 | 49 | 50 |
| Possible next A | 50 | 52 | 49.5 | 51 |
| Possible next B | 50 | 50.5 | 46 | 47 |
Copy as plain text
1. Define the observation
Use period 5 open 50 and close 50; write the definition used here.
You should see: Zero-body doji under this exact-equality exercise definition.
Shape terminology needs a stated rule and interval, not a hidden software setting.
2. Try an opposing continuation
Compare both supplied next days with the same prior doji.
You should see: A closes at 51; B at 47; both are compatible invented continuations.
One historical shape does not logically force one next outcome.
3. Measure body containment
Compare separate body intervals 49–51 and 48.5–51.5.
You should see: The second up body fully contains the first down body.
This describes open/close geometry; wick containment and forecasting are different claims.
4. Calculate a historical average
Add closes from periods 4, 5 and 6 and divide by three.
You should see: $49.00; (50 + 50 + 47)/3.
An average smooths history and contains no future price observations.
5. Test the observed band
Compare the 48–49 prior-low band with period 6’s low 46.
You should see: The later low is below the band; it is not a guaranteed floor.
A useful description can still fail as a trading prediction.
What to finish
A pattern note with numerical definitions, $49 three-period average, opposing continuations and a failed observed-support band.
Watch for this
Selecting only the later success of a pattern and calling it proof of reliable prediction.
How can I tell I understand it?
Distinguish an exact observation from a forecast, and show a changed input or counterexample rather than claiming signal accuracy.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
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Sources and further reading
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Source & access notes · checked 2026-10-01
Inspected OHLC/body/wick and chart-interval representations. Only general chart concepts apply here; this course uses original stock fixtures, not copied futures charts.
Access: Public official page inspected with the web reader on 2026-10-01; no broker tools or real transactions operated.
Reuse: Concept references only. All prices, records, charts, worked examples, exercises and questions are original fictional LifeStarter material; no source diagram or exercise copied.
Source & access notes · checked 2026-10-01
Inspected arithmetic of a simple moving average. No accuracy claims or source examples reproduced.
Access: Public official page inspected with the web reader on 2026-10-01; no broker tools or real transactions operated.
Reuse: Concept references only. All prices, records, charts, worked examples, exercises and questions are original fictional LifeStarter material; no source diagram or exercise copied.
Source & access notes · checked 2026-10-01
Inspected historical-pattern analysis, trading costs, missed-opportunity risks and distinction from long-term investing.
Access: Public official page inspected with the web reader on 2026-10-01; no broker tools or real transactions operated.
Reuse: Concept references only. All prices, records, charts, worked examples, exercises and questions are original fictional LifeStarter material; no source diagram or exercise copied.
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