Encyclopedia of Chart Patterns
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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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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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