Description
Chart Patterns: After the Buy goes beyond simple chart pattern identification to show what comes next. Author and stock trader Thomas Bulkowski is one of the industry’s most respected authorities in technical analysis; for this book, he examined over 43,000 chart patterns to discover what happens after you buy the stock. His findings are detailed here, to help you select better buy signals, avoid disaster, and make more money.
Author’s Introduction:
I used to think chart patterns were the footprints of the smart money. Now I believe the definition should include the dumb money, too, and everyone in between.When I trade a stock, others are doing the same. We move price up or down, depending on how strongly we want to buy or sell. If enough of us buy a stock with enthusiasm and continue to buy, we force the stock to trend upward. Prolonged ag-gressive selling forces the stock down. That buying and selling creates patterns on the price chart, patterns that we see repeatedly.
Chart patterns have been around for decades. I expect them to be around in the coming decades, too, because the forces of buying demand and selling pressure will still be present to shape the charts. Machines may change the dynamics, but human emotion will still be there to leave the footprints.
The idea for this book came in the form of a question. What happens after I buy a stock showing a chart pattern? Answering that question for 20 chart patterns took two years. The result is this reference book. Most books focus on what triggers a buy. Fewer books focus on what happens next. I used 43,229 chart patterns pulled from bull markets to uncover the secrets to what happens after buying a stock. The results help select better buy signals so you have an increased chance of making money and avoiding disaster. All you have to do is match your setup to one of the configurations illustrated in this book.
Most chapters follow the same layout so using this reference book is easier, too. The Behavior at a Glance section illustrates how a chart pattern behaves, with the most important performance statistics right on the charts. Identification Guidelines follow so even people new to chart patterns will know what to look for. And with almost 370 stock charts and illustrations, you have plenty of examples.Next comes the Buy and Sell Setups, backed by statistics that describe how well they work.
The Best Stop Locations tell how often a stop in a chart pattern will trigger. That alone is worth the price of this book.The section on Configuration Trading shows how your setup is likely to be-have in the future. It is the heart of the book.The Measure Rule tells how to set price targets and how often you can expect price to reach those targets for both up and down breakouts.The Trading section gives examples of how to use the information and discusses actual trades. You will find the Setup Synopsis charts at the end of each chapter to be invalu-able. The charts combined the ideal setups in one location, making it easy to match your trade with what could happen after you buy.
Contents:
- Big M
- Big W
- Broadening Bottoms
- Broadening Tops
- Double Bottoms
- Double Tops
- Earnings Miss
- Flags and Pennants
- Head-and-Shoulders Bottoms
- Head-and-Shoulders Tops
- Measured Move Down
- Measured Move Up
- Price Mirrors
- Price Mountains
- Rectangles
- Reversals and Continuations
- Straight-Line Run Down
- Straight-Line Run Up
- Tops and Bottoms
- Trends and Countertrends
- Triangle Apex and Turning Points
- Triangles, Ascending
- Triangles, Descending
- Triangles, Symmetrical
- Vertical Run Down
- Vertical Run Up
