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Encyclopedia of Chart Patterns. Thomas N. Bulkowski
Читать онлайн.Название Encyclopedia of Chart Patterns
Год выпуска 0
isbn 9781119739692
Автор произведения Thomas N. Bulkowski
Жанр Ценные бумаги, инвестиции
Издательство John Wiley & Sons Limited
Throwbacks and pullbacks. A throwback or pullback occurs about two‐thirds of the time, and it takes 11 or 12 days to complete the trip back to the breakout price (on average).
In all cases, when a throwback or pullback occurs, performance suffers. To avoid a throwback or pullback, look for nearby support or resistance that is strong enough to turn price back. Good luck with that. I've not been able to predict whether a throwback or pullback will happen. I just assume they will and go from there. If they don't appear, I'm as happy as a kid with a bag full of candy on Halloween.
You might try looking for overhead resistance or underlying support within 5% to 11% away from the pattern (those percentages are averages of how far price travels in 6 days, according to the table).
Gaps. Sometimes a breakout day gap helps and sometimes not. Downward breakouts have results that are one percentage point apart, so they may not be statistically significant. Upward breakouts see better performance if a gap is absent. That's counter to normal trading wisdom. Other chart patterns see performance improve if a gap occurs.
If you want to participate in a gap trade, know that I measured performance using the opening price the day after the gap, so you can buy a stock after it shows a gap and maybe you can participate in the better performance.
Table 11.4 Breakout and Post‐Breakout Statistics
| Description | Bull Market, Up Breakout | Bear Market, Up Breakout | Bull Market, Down Breakout | Bear Market, Down Breakout |
|---|---|---|---|---|
| Breakout direction | 60% up | 49% up | 40% down | 51% down |
| Performance of breakouts occurring near the 12‐month low (L), middle (M), or high (H) | L 34%, M 46%, H 41% | L 23%, M 26%, H 25% | L –16%, M –14%, H –12% | L –23%, M –22%, H –17% |
| Throwbacks/pullbacks occurrence | 67% | 64% | 67% | 67% |
| Average time to throwback/pullback peaks | 5% in 7 days | 7% in 6 days | –6% in 6 days | –11% in 7 days |
| Average time to throwback/pullback ends | 12 days | 11 days | 11 days | 12 days |
| Average rise/decline for patterns with throwbacks/pullbacks | 38% | 24% | –13% | –19% |
| Average rise/decline for patterns without throwbacks/pullbacks | 48% | 26% | –14% | –26% |
| Percentage price resumes trend | 75% | 69% | 54% | 49% |
| Performance with breakout day gap | 38% | 22% | –14% | –21% |
| Performance without breakout day gap | 42% | 26% | –13% | –22% |
| Average gap size | $0.84 | $0.35 | $0.92 | $0.63 |
Table 11.5 shows statistics related to size.
Height. In all cases, tall patterns see better post‐breakout performance than short ones.
To use this finding, measure the pattern's height from the highest high to the lowest low. Divide the difference by the breakout price (for upward breakouts, it is the highest high in the pattern; for downward breakouts, use the lowest low). Then compare the result with the median shown in the table. A result higher than the median means you have a tall pattern; lower means a shorter pattern. For best results, select tall broadening tops and avoid short ones.
Table 11.5 Size Statistics
| Description | Bull Market, Up Breakout | Bear Market, Up Breakout | Bull Market, Down Breakout | Bear Market, Down Breakout |
|---|---|---|---|---|
| Tall pattern performance | 46% | 26% | –16% | –22% |
| Short pattern performance | 36% | 24% | –12% | –21% |
| Median height as a percentage of breakout price | 10.6% | 15.2% | 10.9% | 18.5% |
| Narrow pattern performance | 39% | 26% | –13% | –21% |
| Wide pattern performance | 44% | 24% | –14% | –22% |
| Median width | 45 days | 45 days | 38 days | 41 days |
| Short and narrow performance | 38% | 28% | –11% | –20% |
| Short and wide performance | 35% | 13% | –11% | –23% |
| Tall and wide performance | 47% | 29% | –16% |
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