Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 75

Figure 5.4 shows a sample trade that Scott made. Scott has been a longtime admirer of Apple products, so when his software flagged a bullish bat, he took an interest in the stock. I show the bat as turns XABCD.

“I measured the height of the pattern,” he said and pointed to the chart. From the peak at A (60.96) to the low at X (50.61), the height was 10.35.

His statistics on bullish bats showed there was a 60% probability that the stock would climb to 71.31, which is the height added to peak A. (The 60% number comes from the traditional way of gauging chart pattern performance using the measure rule. Price reaches the target 60% of the time when you add the height of the pattern to the top of it.)

“You might not believe this, but I really didn't care about the answer. I wanted to hold the stock for the long term, but having that background info is reassuring.”

Scott is also a fan of trendlines. For entry, he drew a trendline skirting the peaks going down to turn D. The day after D, the stock closed above the line, signaling a buy (with the belief that the bearish bat had found a bottom at D).

Figure 5.4 This is a sample trade using a bullish bat.

“Here's where I got creative. I used the bullish AB=CD chart pattern to find that turn D was overdue.” It predicted a bottom priced at 53.34, located in the area gap at G, so that gave Scott more confidence that the stock had put in a bottom at D. Regardless, he bought the stock at the open the next day and received a fill at 53.66.

“I placed a stop below the low at D, and below 52.00. Know why?” Before I could answer, he said, “Because at 51.83 it's seven cents below D and it avoids the round number 52. That's where others might place their trades.”

The stock cooperated and moved higher, forming a slightly upward curving trend. I show that on the chart (log scale) as a series of three lines rising toward E.

When the stock closed below the trendline near E, he placed an order to sell the stock at the open the next day. He received a fill at 87.14 for a gain of 33.48 a share, or 62% (not including commissions).

“I got lucky on this trade,” he told me.

“Why?”

“Two reasons. First, because the stock might not have turned upward at D. And second, I forgot to raise my stop.”

That's not always a bad thing, especially for long‐term holds. If you're swing trading or short‐term trading, then consider using a trailing stop, one that price stalks as it moves upward.

Another lucky factor was how the stock behaved with price rising in a near straight‐line run up to E. Although the stock retraced after E to 74.60, it went on to a new high at just over 100 in September 2012. The stock need not have dropped far at E before moving higher, too. Still, for a relatively short‐term trade, the exit was timely and the entry was delicious, too. Isn't there a red delicious brand of apple? Get it? He traded apple stock…