Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 66

Figure 4.4 shows how Pete used a bearish bat. He bought the stock when it broke out to a new high, at E (the highest price bar on the chart). “Don't laugh,” he told me. “How many of these zingers have you got caught in?”

I didn't say a word, but blushed instead. Many years ago I bought a stock and watched it more than double. Wonderful! But I felt it had more to give so I held on. It lost all of its gains, dropped in half, and I sold near the low. Oops. Then it recovered. Of course it recovered with me watching from the sidelines.

So I know how Pete feels. Maybe you do, too. As traders, we all make mistakes. And that's the beauty of experience. It allows you to recognize a mistake when you make it again.

Pete believed in the company and had profited over the years by holding onto the stock. He checked in every few weeks and saw price continuing to move lower. The decline didn't bother Pete. Why?

“Because it's a chance to buy the stock at a lower price. Like it's on sale.”

Figure 4.4 Pete bought near the high and made a quick swing trade after D.

He made a fortune using the buy‐the‐dip method to trade stocks (that is, buy when price makes a significant dip). The problem with that logic is that the stock has to recover. “I have faith,” he said and pulled out a cross draped on a necklace strung around his neck. He kissed the cross and then tucked it back under his shirt.

Pete's computer alerted him to the bearish bat pattern which formed as labeled on the chart (XABCD).

With additional shares, he decided to trade the throwback (which didn't occur in this pattern). He set a buy order to grab 1,000 shares a penny above X (not D) or 159.37. The stock gapped open higher (breakaway gap) and he received a fill at the open at F, at 163.25.

He used a limit order to sell his 1,000 shares at 5% above X, or 167.34.

The next day, the order filled. He made just over $4,000 in two days. Of course, if he'd held onto the shares and sold at the ultimate high in late January 2020 at 327.85, he would have double his money. That's for a perfect trade, of course.

If he'd held during the Covid‐19 bear market and sold at the late March 2020 low, he'd still pocket almost $50,000.