Encyclopedia Chart Patterns - atw.hu

1 E. Ch WILEY TRADING ADVANTAGE. Trading without Fear I Richard W. Arms, Jr. Neural Network Time Series Forecasting of Financial Markets / E. Michael Azoff Option Market Making I Alan J. Baird Genetic Algorithms and Investment Strategies I Richard J. Bauer, Jr. Technical Market Indicators I Richard J. Bauer, Jr., and Julie R. Dahlquist Seasonality /Jake Bernstein The Hedge Fund Edge I Mark Boucher Encyclopedia of Chart Patterns I Thomas N. Bulkowski Macro Trading and Investment Strategies I Gabriel Burstein Encyclopedia Beyond Technical analysis I Tushar Chande The New Technical Trader !

2 Tushar Chande and Stanley S. Kroll Trading the flan I Robert Deel of New Market Timing Techniques I Thomas R. DeMark The New Science of Technical analysis / Thomas R. DeMark Point and Figure Charting I Thomas J. Dorsey Trading for a Living I Dr. Alexander Elder Chart Patterns Study Guide for Trading for a Living I Dr. Alexander Elder The Day Trader's Manual I William F. Eng The Options Course I George A. Fontanills The Options Course Workbook I George A. Fontanills Pattern, Price & Time /James A. Hyerczyk Profits from Natural Resources I Roland A.

3 Jansen The Trading Game I Ryan Jones Trading Systems <b Methods, Third Edition I Perry Kaufman Trading to Win I Ari Kiev, The Intuitive Trader I Robert Koppel Thomas N. Bulkowski Nonlinear Pricing I Christopher T. May McMillan on Options I Lawrence G. McMillan Trading on Expectations I Brendan Moynihan Intermarket Technical analysis I John J. Murphy The Visual Investor I John J. Murphy Beyond Candlesticks I Steve Nison Cybernetic Trading Strategies I Murray A. Ruggiero, Jr. The Option Advisor I Bernie G. Schaeffer Fundamental analysis I'Jack Schwager Study Guide to Accompany Fundamental analysis I'Jack Schwager Managed Trading I Jack Schwager The New Market Wizards I Jack Schwager Technical analysis /Jack Schwager Study Guide to Accompany Technical analysis /Jack Schwager Schwager on Futures I Jack Schwager Gaming the Market I Ronald B.

4 Shelton The Dynamic Option Selection System I Howard L. Simons Option Strategies, Second Edition I Courtney Smith Trader Vie III Victor Sperandeo Campaign Trading/]ohn Sweeney The Trader's Tax Survival Guide, Revised Edition I Ted Tesser The Mathematics of Money Management I Ralph Vince The New Money Management I Ralph Vince Trading Applications of Japanese Candlestick Charting I Gary Wagner and Brad Matheny Trading Chaos I Bill Williams New Trading Dimensions I Bill Williams Long-Term Secrets to Short-Term Trading I Larry Williams John Wiley & Sons, Inc.

5 Expert Trading Systems I John R. Wolberg New York Chichester . Weinheim Brisbane Singapore Toronto To my parents, who continued to love me even after my homemade rocket set the lawn on fire, and to my four-legged best friend, Rusty, who saved my life; it grieves me that I couldn't save yours. This book is printed on acid-free paper.. Copyright 2000 by Thomas N. Bulkowski. All rights reserved. Published by John Wiley & Sons, Inc. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4744.

6 Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, (212) 850-6011, fax (212) 850-6008, E-Mail: PERMREQ @ This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional person should be sought.

7 Library of Congress Cataloging-in-Publication Data: Bulkowski, Thomas N., 1957- Encyclopedia of Chart Patterns / Thomas N. Bulkowski. p. cm. (Wiley trading advantage). Includes index. ISBN 0-471-29525-6 (alk. paper). 1. Stocks Charts, diagrams, etc. 2. Commodities Charts, diagrams, etc. 3. Technical analysis . I. Title. II. Series. 2000. dc21 99-15789. Printed in the United States of America. 10 9 8 7 6 5 4 3. Preface When I was a little tyke I decided the easiest way to riches was to play the stock market. It was, after all, a level playing field, a zero-sum game with somebody winning and somebody losing (hint: The winner is always the broker).

8 All one had to do to win was pick the stocks that went up and avoid the stocks that went down. Easy. I kept this in mind when I graduated from Syracuse University with an engineering degree and showed up early for my first professional job. Eacl morning I cracked open the newspaper and plotted my stock picks on a piec\. of paper taped to the wall. Bob, my office mate, used the same newspaper to select his stocks. I chose my selections using strict and exhausting fundamen- tal research, but Bob simply closed his eyes, twirled his hand around, and plunged his finger into the newspaper.

9 When he opened his eyes and removed his finger, he announced another pick. After several months of tracking both our selections, I made a startling discovery: I was getting creamed. Bob's random selections were beating the tar out of my carefully researched choices. I also discovered something else: I was learning a lot by paper trading. With the hesitancy and distrust inherited from my parents, I studied two dozen firms before making my final selection and first purchase: I opened a money market account. The timing was excellent; I was earning over 17% on my cash.

10 At first glance, the return might imply a very risky investment but it was not. The prime rate was, after all, at 21%. Flush with success, I gathered my courage and opened a brokerage account and began investing with the few pennies I saved. Again, the timing was excellent as I caught the beginning of a major bull market. I bought a stock near 3!/2 and watched it go to 46 l/i my first ten-bagger. Lest you think that everything was easy, consider what happened. My stock portfolio was growing by leaps and bounds, but my professional career was about to take a turn for the worse.