Having the ability to recognize patterns in price action trading prior to their actual formation provides a significant advantage and can enhance your profit potential. A prime illustration of this concept can be found in the stock chart of Power Mech projects. At the 2004 price level, I identified the emergence of a descending broadening wedge pattern, which had previously experienced a breakout from a head and shoulders pattern on a lower timeframe.

This astute observation eventually led to a substantial 60% profits from those levels.