Encyclopedia of Chart Patterns

Encyclopedia of Chart Patterns
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The market's bestselling and most comprehensive reference on chart patterns, backed by statistics and decades of experience When the smart money trades the securities markets, they leave behind financial footprints. Combine enough footprints together and you have a trail to follow. That trail becomes what’s called a chart pattern. Encyclopedia of Chart Patterns , Third Edition expands upon Bulkowski's immensely popular Second Edition with fully revised and updated material on chart patterns. Whether you’re new to the stock market or an experienced professional trader, use this book as a reference guide to give you an edge. Within the pages of this book, you’ll learn how to identify chart patterns, supported by easy-to-understand performance statistics describing how well a pattern works, what the failure rate is, and what special quirks suggest better future performance. You’ll discover how often a stop loss order will trigger at various locations within a chart pattern, how the chart pattern’s performance has evolved over the past three decades, and how to profit from failure by trading busted patterns. This broadened and revised Third Edition offers investors the most comprehensive, up-to-date guide to this popular method of market analysis. Written by a leading expert on chart patterns, Tom Bulkowski, this edition includes revised statistics on 75 chart patterns including 23 new ones, with pictures and performance statistics, packaged within easy-to-read text. Gain essential knowledge of chart patterns and how they are used to predict price movements in bull and bear markets New tables include how often stops are hit, busted pattern performance, performance over the decades, and special pattern features Joining Tour, Identification Guidelines, Focus on Failures, Statistics, Trading Tactics and Sample Trade is Experience. It puts you in the passenger’s seat so you can share lessons learned from Bulkowski's trades This edition reports on statistics from nearly four times the number of samples used in the Second Edition and ten times the number in the First Edition The Encyclopedia of Chart Patterns , Third Edition further solidifies the reputation of this book as the leading reference on chart patterns, setting it far above the competition.

Оглавление

Thomas N. Bulkowski. Encyclopedia of Chart Patterns

Encyclopedia of Chart Patterns

Titles by Thomas Bulkowski

Preface to the Third Edition

This Book

What's New?

About the Statistics

Preface to the Second Edition

Preface to the First Edition

The Missing Million

Book Layout

Acknowledgments

Table of Contents

List of Tables

List of Illustrations

Guide

Pages

Introduction

Investment Footprints

The Database

The Sample Trade

Testing Chart Patterns

Trading the Double Bottom

Ultimate High

Ultimate Low

Chart Pattern Failures

Realistic?

1 How to Trade Chart Patterns

Bottom Fishing, Buy the Dip

Daily Chart Setup

Another Setup

Pothole Setup

Patternz

Another Way

Knots and Swing Trading Pullbacks

Setup 2

Setup 3

Knots and Throwbacks

Setup 2

Setup 3

Performance Contests

2 AB=CD®, Bearish

RESULTS SNAPSHOT

Downward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

3 AB=CD®, Bullish

RESULTS SNAPSHOT

Upward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

4 Bat®, Bearish

RESULTS SNAPSHOT

Downward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

5 Bat®, Bullish

RESULTS SNAPSHOT

Upward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

6 Big M

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

7 Big W

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Abercrombie & Fitch Co

Teradyne Inc

Ann Taylor

Energy East Corp

Sara Lee Corp

Swift Transportation Co

Sample Trade

8 Broadening Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Southwest Airlines

Hercules Inc

Sample Trade

9 Broadening Formation, Right‐Angled and Ascending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Hughes Supply Inc

XL Group

Sample Trade

10 Broadening Formation, Right‐Angled and Descending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Cisco Systems

National Fuel Gas

Southwest Airlines

Con‐way

Sample Trade

11 Broadening Tops

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Advanced Micro Devices Inc

Chico's FAS

Southwest Airlines

Sample Trade

12 Broadening Wedge, Ascending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

13 Broadening Wedge, Descending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

D.R. Horton Inc

Texas Industries

Sample Trade

14 Bump‐and‐Run Reversal, Bottom

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

15 Bump‐and‐Run Reversal, Top

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

16 Butterfly®, Bearish

RESULTS SNAPSHOT

Downward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

17 Butterfly®, Bullish

RESULTS SNAPSHOT

Upward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

18 Cloudbanks

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Northwest Pipe Co

Dead‐Cat Bounce

Sample Trade

19 Crab®, Bearish

RESULTS SNAPSHOT

Downward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

20 Crab®, Bullish

RESULTS SNAPSHOT

Upward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

21 Cup with Handle

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Rowan Companies

EMC Corp

CNO Financial

Sample Trade

22 Cup with Handle, Inverted

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

23 Diamond Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

24 Diamond Tops

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

25 Diving Board

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Bounce Trading

Experience

Sample Trade

26 Double Bottoms, Adam & Adam

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

KB Home Corp

Charles Schwab Corp

Southwest Airlines

Sample Trade

27 Double Bottoms, Adam & Eve

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Public Service Enterprise Group

Hughes Supply Inc

Family Dollar

Sample Trade

28 Double Bottoms, Eve & Adam

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Alaska Air Group

Cache

Sample Trade

29 Double Bottoms, Eve & Eve

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Guess Inc

CH Energy

Cypress Semiconductor

Sample Trade

30 Double Tops, Adam & Adam

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

31 Double Tops, Adam & Eve

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

32 Double Tops, Eve & Adam

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

33 Double Tops, Eve & Eve

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

34 Flags

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

35 Flags, High and Tight

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

36 Gaps

RESULTS SNAPSHOT

Upward Gaps, Close within a Week

Downward Gaps, Close within a Week

Tour

Identification Guidelines

Statistics: Area Gaps

Statistics: Breakaway Gaps

Statistics: Continuation Gaps

Statistics: Exhaustion Gaps

Trading Tactics and Sample Trade

Experience

37 Gartley, Bearish

RESULTS SNAPSHOT

Downward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

38 Gartley, Bullish

RESULTS SNAPSHOT

Upward Moves

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

39 Head‐and‐Shoulders Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

40 Head‐and‐Shoulders Bottoms, Complex

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Big Lots

Chemtura

Sample Trade

41 Head‐and‐Shoulders Tops

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Michaels Stores

Graco

Pinnacle West Capital Corp

iShares U.S. Basic Materials

Brooks Automation

Wex Inc

Sample Trade

42 Head‐and‐Shoulders Tops, Complex

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

43 Horn Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

44 Horn Tops

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

45 Island Reversals

RESULTS SNAPSHOT

Island Tops (Downward Breakouts)

Island Bottoms (Upward Breakouts)

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

46 Measured Move Down

RESULTS SNAPSHOT

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Assurant Inc

Michaels Stores

Energy Select Sector SPDR Fund

Sample Trade

47 Measured Move Up

RESULTS SNAPSHOT

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

48 Pennants

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Coherent

Duriron

Sample Trade

49 Pipe Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

EMC

Hercules Inc

Hi‐tech Pharmacal

Spansion

Sample Trade

50 Pipe Tops

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

51 Rectangle Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

52 Rectangle Tops

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

FMC Corp

Northwest Pipe Co

Wex Inc

Labor Ready

Delphi Financial Group

American Power Conversion Corp

Sample Trade

53 Roof

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

54 Roof, Inverted

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

55 Rounding Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Hudson Global

Encore Wire

Ferro

Millennium Pharmaceuticals

Sample Trade

56 Rounding Tops

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

J.B. Hunt

Rowan Company

Sample Trade

57 Scallops, Ascending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

58 Scallops, Ascending and Inverted

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

59 Scallops, Descending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Gleason Corp

Titanium Metals

Sample Trade

60 Scallops, Descending and Inverted

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

61 Three Falling Peaks

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

62 Three Peaks and Domed House

Tour

Identification Guidelines

1960 Example

1990 Example

2012 Example

Check Out

63 Three Rising Valleys

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

64 Triangles, Ascending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Identification Challenges

Focus on Failures

Statistics

Trading Tactics

Experience

Andrew Corp., Kenneth Cole Productions, and Park Electrochemical

Proctor & Gamble

American Electric Power

Beazer Homes USA

Cisco Systems

Celadon Group

National Fuel Gas

Pfizer

Sample Trade

65 Triangles, Descending

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Identification Challenges

Focus on Failures

Statistics

Trading Tactics

Experience

Johnson & Johnson

Southwest Airlines

R.G. Barry

Building Materials Holding Corp

ExpressJet Holdings

Frontier Oil Corp

Sample Trade

66 Triangles, Symmetrical

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

TD Ameritrade Inc

Northwest Pipe Co

Questar Corp

Delphi Financial Group Inc

Sample Trade

67 Triple Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Albemarle

Vertex Pharmaceuticals

Cemex

Sara Lee

Sample Trade

68 Triple Tops

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Hartford Financial Services Group Inc

Honeywell International

Sample Trade

69 V‐Bottoms

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Sample Trade

70 V‐Bottoms, Extended

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experiences

Sample Trade

71 V‐Tops

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

72 V‐Tops, Extended

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

73 Wedges, Falling

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Experience

Millennium Pharmaceuticals

Ben and Jerrys A

Freeport‐McMoRan Copper and Gold

Sample Trade

74 Wedges, Rising

RESULTS SNAPSHOT

Upward Breakouts

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

75 Wolfe Wave®, Bearish

RESULTS SNAPSHOT

Downward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

76 Wolfe Wave®, Bullish

RESULTS SNAPSHOT

Upward Breakouts

Tour

Identification Guidelines

Focus on Failures

Statistics

Trading Tactics

Sample Trade

Statistics Summary

Glossary

Terminology

Visual Index of Chart Patterns

Index

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Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.

The Wiley Trading series features books by traders who have survived the market's ever‐changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice trader, professional, or somewhere in‐between, these books will provide the advice and strategies needed to prosper today and well into the future.

.....

D is your short‐term swing target. The stock will rise and hit that region and likely turn back to the breakout in a throwback (which it did in this example, after reaching E).

Figure 1.9 Here are two setups that work well for swing trading throwbacks.

.....

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