As of 08/16/2019
  Indus: 25,886 +306.62 +1.2%  
  Trans: 9,967 +202.83 +2.1%  
  Utils: 831 +2.56 +0.3%  
  Nasdaq: 7,896 +129.37 +1.7%  
  S&P 500: 2,889 +41.08 +1.4%  
YTD
 +11.0%  
 +8.7%  
 +16.6%  
 +19.0%  
 +15.2%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019
As of 08/16/2019
  Indus: 25,886 +306.62 +1.2%  
  Trans: 9,967 +202.83 +2.1%  
  Utils: 831 +2.56 +0.3%  
  Nasdaq: 7,896 +129.37 +1.7%  
  S&P 500: 2,889 +41.08 +1.4%  
YTD
 +11.0%  
 +8.7%  
 +16.6%  
 +19.0%  
 +15.2%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019

Bulkowski's Busted Patterns

 

Information on busted chart patterns is discussed in my book, Visual Guide to Chart PatternsVisual Guide to Chart Patterns book.. You can find information in the book starting with Chapter 22: "Busted Pattern Buy Setups" (starting on page 229) and in Chapter 25, "Busted Pattern Sell Signals."

I show a picture of the book on the right.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

Links To Busted Chart Patterns

  1. Busted ascending triangles
  2. Busted descending triangles
  3. Busted double bottoms
  4. Busted double tops
  5. Busted head-and-shoulders Bottoms
  6. Busted head-and-shoulders Tops
  7. Busted Performance. A comparison to themselves and other chart patterns.
  8. Busted rectangles
  9. Busted symmetrical triangles
  10. Busted triple bottoms
  11. Busted triple tops

Table of Contents

 

Latest Releases

What Are Busted Chart Patterns?

A busted chart pattern is one in which price breaks out in one direction from a chart pattern, but moves less than 10% before reversing and breaking out in the new direction. A "breakout" means a close above the top or a close below the bottom of a chart pattern. This measure is used so that all busted chart patterns can be compared on an apples-to-apples basis.

The idea behind a busted chart pattern is that the move is often stronger from a failed chart pattern than from one that works. For example, in my book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, the average rise from 286 triple bottoms in a bull market is 37%.

The average rise from 145 failed triple tops in bull markets, is 42%.

Why does better performance happen? I can only guess at the cause. Perhaps you have heard of the belief that the market likes to confound the most people. If everyone expects the market to drop, it rises instead. A triple top is supposed to break out downward, and it does. But when the drop is meager and price rises, it takes on a life of its own and soars.

Unfortunately, like all market techniques, busted chart patterns are not perfect, meaning that they fail to perform as expected, too.

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Busted Pattern Elements

All busted chart patterns share these elements, but the benchmarks are arbitrary, set by me years ago.

Examples of busted chart patterns are included in the links above.

Busting a Bust?

A chart pattern can bust multiple times. For example, price breaks out downward then soars and busts out upward, reverses and moves lower for a double bust. If it drops less than 10% before shooting upward and closing above the top of the pattern, it's a triple bust. This type of up and down motion can continue for months.

How often does it occur? Research using triple tops shows that single busts happen 19% of the time. Double and triple busts occur 1% of the time, each. A triple bust includes those busting three or more times.

-- Thomas Bulkowski

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Other Busted Examples

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

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