Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 65

The real purpose of the bearish bat is for swing traders to predict the turn at D and then go short, anticipating a drop to the bottom of the pattern. Will price sink that far? Maybe, maybe not. Let's look at some number to see if we can model behavior better.

Table 4.3 Price Move after Pattern End

Description	Bull Market	Bear Market
How often does price turn at D?	86%	86%
How many drop to point A?	35%	38%
How many drop to point B?	81%	80%
How many drop to point C?	48%	46%

Table 4.3 uses numbers to show how price behaves after the pattern completes at D.

How often does price turn at D? At the end of the pattern, price can form a minor high at D or price can continue trending upward (as in a straight‐line run up). Most of the time (86%), the stock will form a minor high at D. To find the reversal rate, I checked for a minor high appearing there (that is, I checked to see if price actually turned lower). Figure 4.3 shows an example where the stock failed to turn significantly lower at D.

How many drop to…? This measures the drop after D but uses the pattern's turns as targets. For example, I found that in bull markets, the stock reached turn B 81% of the time. Turn B is the closest turn below D, so it should, and does, have the highest hit rate in the table.

At the bottom of the pattern is point A. Price reaches A just over a third of the time.

You can use these findings to help calculate where your stock might turn. Because you're dealing with probabilities, anything can happen.