Encyclopedia of Chart Patterns, Covers the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape todays trading and uses statistics to back up his approach.
At the back of the book is an Index of Chart Patterns. If you suspect your stock is making a chart pattern but do not know what to call it, the Index of Chart Patterns is the first place to look. Page numbers beside each pattern direct you to the associated chapter.
The chapters are arranged alphabetically in two sections; chart patterns and event patterns. Within each chapter, you are first greeted with a “Results Snapshot” of the major findings followed by a short discussion. Then, a “Tour” invites you to explore the chart pattern. “Identification Guidelines,” in both table form and in-depth discussion, make selecting and verifying your choices easier.
No work would be complete without an exploration of the mistakes, and the “Focus on Failures” section dissects the cause of failures. The all-important “Statistics” section follows. How do you trade a chart pattern? That is what the “Trading Tactics” and “Sample Trade” sections explore. The “For Best Performance” section includes a list of tips and observations on how to select better performing patterns.
If you have ever worked on a car or done some woodworking, then you will recognize the importance of selecting the right tool for the job. You would not want to use a flat-head screwdriver when a Phillips works better. Both do the job but they are hardly interchangeable.
Sometimes it is not a screwdriver you should be using, but a chisel. Selecting the proper tools and knowing how to use them is half the battle. Encyclopedia of Chart Patterns is a lot like that, helping to sort the wheat from the chaff. Sometimes a chart pattern is frightening enough that you will want to take profits. At other times, the best trade that you can make is none at all.