Visual Guide to Chart Patterns

Bloomberg Financial Series Visual Guide to Chart Patterns

The Bloomberg Financial Series Visual Guide to Chart Patterns provides step–by–step instructions on using technical chart patterns to spot potential price movement and improve trading returns.

Internationally known author Thomas Bulkowski is a leading expert on chart patterns and a successful investor with thirty years of experience trading stocks. In this easy–to–use guide he shows you how to recognize chart patterns, understand why they behave as they do, and learn what it means when you see one. Most importantly, he tells you how to identify basic buy and sell signals that the different types of patterns reveal.

Light in tone, the book is aimed specifically at the investor or trader already experienced in the stock market, but not necessarily familiar with chart patterns. Trading chart patterns is easy, but making money using them is not. With the knowledge in this book, you′ll learn to see not just squiggles on price charts, but footprints of the smart money.

The Bloomberg Financial Series Visual Guides cover today′s most relevant finance and trading topics in a comprehensive, yet easy–to–follow style. The content is presented in the most visual manner thus bringing to life key concepts for finance professionals and truly lives up to the series name by examining concepts in a highly visual way all charts are in color and presented in a large format for ease of use. Other strong visual attributes include consistent elements that function as additional learning aids for the reader, such as: Key Points, Definitions, Step–by–Step, Do It Yourself, and Bloomberg Financial Series Visual Guide functionality.

And for e–reader users, the Bloomberg Financial Series Visual Guides are available as enhanced e–books offering special features, like a Test Yourself section where you can test your newly honed knowledge and skills. The enhanced e–book version of this edition includes video tutorials and special pop–up features. They can be purchased wherever e–books are sold.

Acknowledgments ix

Introduction xi

Part I: The Basics 1

Chapter 1: Pattern Recognition Made Easy 3

Chapter 2: Minor Highs and Lows 13

Chapter 3: Trendlines 19

Chapter 4: Support and Resistance 29

Chapter 5: Gaps 39

Chapter 6: Throwbacks and Pullbacks 47

Part II: Pattern Identification 53

Chapter 7: Rectangles 55

Chapter 8: Ascending Triangles 69

Chapter 9: Descending Triangles 81

Chapter 10: Symmetrical Triangles 93

Chapter 11: Flags and Pennants 105

Chapter 12: Double Bottoms 115

Chapter 13: Triple Bottoms 127

Chapter 14: Double Tops 139

Chapter 15: Triple Tops 151

Chapter 16: Head–and–Shoulders Bottoms 163

Chapter 17: Head–and–Shoulders Tops 175

Part III: Basic Buy Setups 187

Chapter 18: Basic Buy Setups 189

Chapter 19: Failures 205

Chapter 20: The Throwback Buy Setup 215

Chapter 21: Measuring Flags and Pennants 225

Chapter 22: Busted Pattern Buy Setups 229

Chapter 23: Trading Setups and Tips 243

Part IV: Basic Sell Signals 251

Chapter 24: Chart Pattern Sell Signals 253

Chapter 25: Busted Pattern Sell Signals 271

Chapter 26: Triangle Apex Sell Signal 289

Chapter 27: Trendline Sell Signals 293

Chapter 28: Swing Rule 299

Chapter 29: A Tale of Two Trades 303

Bloomberg Functionality Cheat Sheet 309

Visual Appendix of Chart Patterns 311

Bibliography 317

About the Author 319

Index 321

Thomas N. Bulkowski is the author of Encyclopedia of Chart Patterns, Second Edition, Getting Started in Chart Patterns, Encyclopedia of Candlestick Charts, and Trading Classic Chart Patterns. He is a frequent contributor to Active Trader and Technical Analysis of Stocks & Commodities magazines. Before earning enough from his investments to "retire" from his day job at age thirty–six, he was a hardware design engineer at Raytheon and a senior software engineer for Tandy Corporation. His website address is www.thepatternsite.com, which offers free access to hundreds of articles, research, and blog posts written by Bulkowski.