Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 137

Let's start with three trades in Cisco Systems. All of them traded the same broadening pattern that formed in June to September 2000.

In the first trade, the stock looked to be doing a partial decline. The pattern had a flat top with three trendline touches and three touches of the lower trendline, too, just as you would expect. The pattern looked ripe to break out upward in the high‐tech boom of the 2000 market (but the general market turned bearish in March, before I bought. I'm not sure I knew that at the time).

I bought the stock after it broke out of a small congestion area (it was a small downward trending pennant with an upward breakout buried within the broadening pattern). I expected the stock to break out upward from the broadening pattern. Instead, it touched the top trendline and headed lower. As a swing trade, it would have been good to sell then, but I didn't. I rode the stock lower and sold after a downward breakout.

The second trade was also within the same pattern, but I bought as price dropped before breaking out downward. This was a “hip shot,” a trade I just glance at and make, confident that it'll work. Each time I pen those words in my trading notebook, I know the trade is going to be a loser (that's what I learned over the years, perhaps well after this trade). Hip shots just don't work for me. Now, I take my time to analyze the situation before trading.

Anyway, I thought the stock was going to turn, but it didn't. It kept going down.

With the third trade, I bought at the lower trendline, expecting an upward bounce. Instead, it closed the day outside the pattern's boundary, breaking out downward from the pattern. The next day, I closed out all three trades and took a loss of 15%, 8%, and 4% on them, respectively.

My notebook tells what I learned.

 Lesson: If an upside breakout from partial decline does not appear immediately, sell.

 Lesson: Do not buy more of a stock as it moves downward across the broadening pattern. Wait for it to bounce off the bottom trendline. Otherwise, the breakout could be downward, resulting in multiple losing trades.

 Lesson: Close out the trade when the market tells you you're wrong.