x.2 General StatisticsTable x.3 Cumulative Failure RatesTable x.4 Breakout and Post‐Breakout StatisticsTable x.5 Size StatisticsTable x.6 Volume StatisticsTable x.7 How Often Stops HitTable x.8 Performance and Failures Over Time for Bull Markets (Bear markets o...Table x.9 Busted PatternsTable x.10 Trading TacticsTable G1 Volatility Stop Calculation
List of Illustrations
1 IntroductionFigure I.1 A double bottom signals a trade entry at D and an exit at the ult...
2 Chapter 1Figure 1.1 The pattern at A and B leads to a strong move higher.Figure 1.2 A diving board on the weekly scale leads to the stock climbing st...Figure 1.3 This diving board fails to act as expected.Figure 1.4 This diving board is on the daily chart.Figure 1.5 This U‐shaped pattern delivers a failure.Figure 1.6 A pothole setup happens after a drop and flat base.Figure 1.7 Here is a swing trade using a double bottom and a double top.Figure 1.8 Shown are three ways to trade a pullback.Figure 1.9 Here are two setups that work well for swing trading throwbacks....
3 Chapter 2Figure 2.1 A bearish AB=CD pattern correctly predicts a downward move in the...Figure 2.2 This bearish AB=CD pattern breaks out upward.Figure 2.3 Price is supposed to turn down at F, but the search for point D e...Figure 2.4 Jacob used the bearish AB=CD pattern to exit a trade.
4 Chapter 3Figure 3.1 This chart shows how a bullish AB=CD pattern sees price turn at D...Figure 3.2 Another example of a bullish AB=CD pattern with an upward breakou...Figure 3.3 This bullish AB=CD has price falling through the predicted turnin...Figure 3.4 George took a loss buying this AB=CD.
5 Chapter 4Figure 4.1 The five turns, X, A, B, C, and D, complete the bearish bat.Figure 4.2 This bearish bat sees price dip after D but still breaks out upwa...Figure 4.3 This bearish bat isn't bearish at all.Figure 4.4 Pete bought near the high and made a quick swing trade after D.
6 Chapter 5Figure 5.1 This bullish bat breaks out upward (at F) and makes a strong push...Figure 5.2 This bullish bat rises after point D, but breaks out downward at ...Figure 5.3 This bullish bat isn't bullish at all. Price fails to turn higher...Figure 5.4 This is a sample trade using a bullish bat.
7 Chapter 6Figure 6.1 This big M sees price rise up to peak B and drop from peak C, bot...Figure 6.2 This big M (BD) struggles to find a bottom between the two peaks ...Figure 6.3 Price fails to drop more than 5% after the downward breakout.Figure 6.4 Justin shorted this big M and lost money on the trade.
8 Chapter 7Figure 7.1 This big W sees price rise, but not very far.Figure 7.2 Price at F almost returns to the launch price, A.Figure 7.3 Price busts the upward breakout from this big W.Figure 7.4 John decided not to trade this big W because of overhead resistan...
9 Chapter 8Figure 8.1 A broadening bottom, specifically a five‐point reversal, so‐calle...Figure 8.2 Don't accept patterns with too much whitespace. This happens when...Figure 8.3 Where's the breakout?Figure 8.4 This broadening bottom breaks out downward, reverses, and busts t...Figure 8.5 A broadening bottom with five alternating touches. Expect an imme...
10 Chapter 9Figure 9.1 Two right‐angled ascending broadening formations bounded by a hor...Figure 9.2 Price pulls back to the base of the formation. Pullbacks occur of...Figure 9.3 Support and resistance areas on a weekly time scale. They appear ...Figure 9.4 The broadening formation breaks out downward, but the stock fails...Figure 9.5 Shown are price targets using half and full formation heights for...
11 Chapter 10Figure 10.1 A horizontal trendline drawn along the tops, and a down‐sloping ...Figure 10.2 Another descending broadening formation, but this one has an upw...Figure 10.3 The left descending broadening pattern shows a trendline rebound...Figure 10.4 AB is not a descending broadening formation.Figure 10.5 A descending broadening formation appears with price that fails ...Figure 10.6 This descending broadening pattern (left) results in a 5% failur...Figure 10.7 This descending broadening pattern has an upward breakout. To co...
12 Chapter 11Figure 11.1 A potential triple top changed into a broadening formation. The ...Figure 11.2 The broadening top has higher highs and lower lows as the price ...Figure 11.3 A weak example of a five‐point reversal or orthodox broadening t...Figure 11.4 Price in this broadening top moved horizontally