Bar Chart Patterns Flashcards
Books
Thomas N. Bulkowski
- Pullbacks occur more frequently
- Throwbacks occur more frequently
- on downward breakouts with less-than-average volume
- on upward breakouts with above-average volume
Breakout on a gap
Reduces the odds that a retracement will occur
Volume on a rectangle pattern
Tends to decline
Shortfall
When, in a rectangle formation, the price fails to reach either the support or resistance zone
Buying the support and selling the resistance
Works better in a trending channel than in a rectangle
H&S, rectangles, triangles, channels, flags, pennants, wedges and bottom picture
Diamond pattern
- A broadening pattern followed by a triangle
- Usually happens at the top of a sharp upward rise in prices
Ideal situation for trading triangles
- Definite breakout
- High trading range within the triangle
- Upward-sloping volume
- Gap on the breakout
- *Seems to work better with small-cap stocks in a rising market
Broadening pattern alternative name
Megaphone, funnel, reverse triangle and inverted triangle
- Rising wedges
- Declining wedges
- tend to breakout downward (69%)
- tend to breakout upward (92%)*
- *Bulkowski 2010
Cup and handle pattern
Flags and pennants
are usually continuation patterns
Island reversal
Breakaway gap
Runaway gap
Exhaustion gap
Common gap
Sequence of gaps
One-bar reversal
When a trading bar high is greater than previous bar high and the close is down from the previous bar close
Two-bar reversal
Horn pattern
Similar to a two-bar reversal but with a smaller bar in between
Bullish Hook reversal
Bearish Hook reversal
Hikkake pattern
Correction within a trend
Are usually profitable entry points
Knockout or KO pattern
- When a throwback occurs on a strong upward trend, place a stop buy at the high of the bar with the second low
- If the next bar is lower, move the stop buy to its high
- Once the position is executed, place a protective stop below the last low
Oops buy pattern
Oops sell pattern
Shark pattern
Marubozu
Shark pattern (candlestick)
- Works better if the pattern is symmetrical
- Buy at the height of the base high
Inside bar conventional belief
When the price breaks in a direction from an inside bar, they will likely continue in the same direction
NR4 (or NR7)
On day NRn + 1 place a buy order at dayn high and a sell order a dayn low
Opening Range Breakout (ORB)
A method of entering a position once a setup has been established from a previous short-term pattern
Doji pattern
Windows pattern
Synonym for gap
Kicking pattern
Harami pattern
- Can indicate a reversal on an increase in volatility
- Only the body of the second candle needs to be inside the range of the first one (not its shadow)
Spinning tops pattern
Three soldiers pattern
- The three bearish soldiers pattern is sometimes called the three black crows pattern
- Can signal a reversal
Morning and Evening star pattern
- The body of the star should not overlap the body of the preceding bar
- The star can be of either color
Hammer and hanging man pattern
Inverted hammer and shooting star pattern
Engulfing pattern
- Can indicate a reversal
- Is stronger when the second bar is considerably larger than the first one
Piercing line and dark cloud pattern
- The opening of the piercing line should be below the inferior shadow of the preceding bar
- The opening of the dark cloud should be above the upper shadow of the preceding bar
Three inside up and down pattern
Three outside up and down pattern
Three line strike pattern
Upside Tasuki gap
Downside Tasuki gap
Tweezer pattern
J-hook pattern
Inverted J-hook pattern
Matching low pattern
Abandoned baby pattern
Two black gapping pattern
