Trading Classic Chart Patterns

by Thomas N. Bulkowski

Das Nachschlagewerk Encyclopedia of Chart Patterns zeigte B rsenh ndlern, wie sie in Kurscharts profitable Muster erkennen k nnen. Hier beschreibt Bulkowski im gleichen praxisnahen, anschaulichen Stil und Format, die seine Encyclopedia so beliebt machten, wie B rsianer diese Muster zu ihrem Vorteil nutzen k nnen. F r jedes vorgestellte Muster bietet Trading Classic Chart Patterns Abschnitte zu typischen Mustern, Musterabfolgen, den zu den Muster f...

• Format: Hardcover
• Language: English
• ISBN: 0471435759
• ISBN13: 9780471435754
• Release Date: March 2002
• Publisher: Wiley
• Length: 464 Pages
• Weight: 2.30 lbs.
• Dimensions: 1.4" x 7.5" x 10.1"

Customer Reviews

Great reference book you'll use continuously

Speaking as a non-engineer, non-math major, I believe this is a well-written, thorough book for anyone who trades using chart patterns and technical analysis, as are all of Mr. Bulkowski's books. Personally, I believe Trading Classic Chart Patterns (TCCP) most benefits those who have at least read a few basic (or not so basic) books on technical analysis, and have dabbled with trying their hand (perhaps unsuccessfully) at reading charts and want more detailed information on the subject. This book is the next step in the learning progression because it gives specifics about which patterns really work and how often, statistical research and explanations about the subject patterns, graphic chart examples (who doesn't like pictures?), failure rates, pattern rankings, where you could expect price to go once a breakout occurs, and so on. Rather than just draw the equivalent of a stick-man figure in the form of a chart and tell you, "this is a double-bottom", like many other books, TCCP goes into great detail about the patterns, what they mean and why. I noticed that some of the more math-oriented reviewers have complained that they wish the book was full of strictly math and statistics, but people like me have to be gently led along down the statistical trail, which Mr. Bulkowski does quite well. However, the book is, in its nature, statistically oriented so fans of Star Trek will love it as well. It's a great reference for any trader, at any level of proficiency. Some other positives: 1) Mr. Bulkowski is not out to sell some system or service to readers and to me it seems he is writing to actually teach; 2) his books are not full of hit-and-run, incomplete references to patterns or fluffy get rich quick stuff; 3) his books are among the few I've read in 7 years of trading (part time) that are reference-grade keepers; and 4) his Website [...] is also full of very useful information. Negatives: None. However, and this is minor, Mr. Bulkowski uses bar charts exclusively in this book, so if you are used to candlesticks, as I am, you won't find them here. However, the patterns are pretty much the same so this really doesn't matter. If you can't get past that, he's also written a great book on candlestick patterns.

Excellent, substantive book

I highly recommend this book to people interested in chart pattern analysis. It is not an "easy read" - it requires concentration and time. The level of detail and complexity, however, is what makes the book so useful.So many trading books put forth simple rules to trade and offer no evidence that their rules work. Anyone who's tried trading knows it is anything but simple - if it were, everyone could become a millionaire in their spare time after reading a couple of books or buying some infomercial product. This doesn't happen. What does happen is that the individual trader has to compete with people who have enormous 1) experience, 2) money, and 3) analytical resources - think big investment banks, hedge funds, and mutual funds. To even think of competing, you've got to learn as much as possible about the complexity of the market. It isn't simple, learn it in a weekend stuff - people spend years and millions of dollars trying to figure it out.So, in the quest to figure it out, this book is one good tool. It offers statistically backed information on which chart patterns work most often, under which conditions. It doesn't include every chart pattern (someone suggested his other book is more inclusive - I haven't read it yet). It is complicated and really not an introduction to technical analysis (there are a lot of good books for that). But assuming you know the basics, and you want to go a little deeper, it's a great book. Where else can you get this kind of tested information? Otherwise, you have to figure it out yourself - through experience (probably costly and not as thorough) or backtesting (certainly time consuming and not as thorough). I'd rather read the book.

Masterful Analysis of Chart Patterns

This 439-page book is authored by Thomas Bulkowski, a successful full-time investor and trader for over 20 years. In his spare time, he previously penned the Encyclopedia of Chart Patterns (2000). For those investors and traders who want to know the performance characteristics of specific popular chart patterns, this book provides the nuts-and-bolts. The book is not light reading and requires a great deal of concentration if you expect to get the most out of it. If you are beginning investor or trader then you may want to wait a bit until you've mastered you chart patterns and terminology before delving into this book. If you like statistical data and like to work with numbers, then this book will make you happy. Each chapter on the chart patterns follow a similar template so that you know what to expect in future chapters as far as format is concerned. The book is divided into two parts. Part I (85 pages) presents new research on trendlines, support and resistance, placing stops, selling considerations, and common trading mistakes. Part II (about 300 pages) reviews in detail 14 chart patterns (market tops and bottoms, head-and-shoulders, rectangles, triangles and scallops - rounded bottoms). Bulkowski also provided a 19-page summary of the bullish and bearish patterns with their performance statistics. Also included is a 9-page glossary and the methodology used to determine the statistics for each pattern.To give you flavor as to one of Bulkowski's findings, consider the most bullish trading patterns. He found the best performance was the descending triangle pattern with an upside breakout. He found the average rise after the breakout for a short-term pattern was 49%. The next best was breakouts from an intermediate-term rectangle pattern with a 42% average rise. And long-term triple bottoms can in third with a return of 41% after breaking outHe looked at the most popular patterns and found the characteristics that make them tick.Bulkowski developed a chart pattern scoring system that helps select better performing chart patterns to trade. Scores above zero infer that the pattern will most likely beat the median, while scores below the median infer that the pattern will be a non-performer. Bulkowski also includes a few case studies for each pattern to aid in the understanding of the patterns and scoring system.Bulkowski suggests that you use the information in the book on the behavior of chart patterns with the scoring system, combined with your own research (such as how the industry group is behaving) and other technical and fundamental indicators to develop your own trading strategy.Overall, Bulkowski presents a masterful text on the most-often used chart patterns. But instead of giving you generalities, he provides specifics based upon detailed statistical analysis. Knowing which patterns work best under which conditions will certainly put the odds of investment success in your favor. Therefor

Finally an excellent book on Chart patterns

I'm a software developer writting a program to do chart patterns. I used his first book, but there were conceptual pieces missing. This book fills in the gaps and more. This is an excellent buy and well worth the money! If you are serious about Chart Patterns, then I would suggest this book as a first read and then the encyclopedia of Chart Patterns as a reference. Good humor in the book as well. I like that.

Author's comments

I wrote the book for novice investors with useful information for the seasoned pro. The Getting Started section explores Trendlines (including internal trendlines and tails, point spacing, number of touches, length, angle, volume), backed up by performance statistics for each; Support and Resistance (round number, moving average, chart pattern, trendline, old high/old low, horizontal consolidation region, including price prediction); Stops (various types including beta-adjusted trailing stops); and common trading mistakes.Chart pattern reference section: Each chapter examines one pattern type and describes the chart pattern as it behaves under various conditions. I score performance in easy to use and understand tables. For example: Diamonds with downward breakouts occurring in small cap stocks have declines averaging 27% (score: +1), mid caps decline 23% (score: +1), and large caps decline 19% (score: -1). If the diamond chart pattern you're looking at is in a mid cap stock, then it scores +1. Continue scoring your chart pattern using the other eight tables and total the scores. Totals above zero suggest performance above the median; totals below zero suggest underperformance. Patterns with totals greater than zero typically perform two to three times better than those scoring less than zero. No guarantees, but the method tends to highlight stock chart patterns that will do well and discards those that won't. Think of the scoring method as another checklist to consult before trading, not as a trading system replacement, so you can continue using the investment tools most comfortable to you.Case studies in each chapter walk you through applying the method to your chart pattern and discuss actual trades I made, where possible.Statistics Summary and Analysis at the end of the book compares the performance results in sixteen tables for both bullish and bearish chart patterns. Glossary and Methodology defines terms and statistical methods so you can reproduce the results yourself.There is almost no overlap between this book and my prior one, "Encyclopedia of Chart Patterns" (Wiley, 2000)....