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Written and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.
For more information on volume trend, read my book,
Encyclopedia of Chart Patterns, Second Edition  .
Each chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics (including volume trend), trading tactics, and sample trade. Below is just a sliver of the information contained in the book.
Volume trends up or down. I consider the trend, found using linear regression from the
start of the chart pattern
to the end, separate from the volume shape. Although volume may have a U, dome, or random
shape, volume may trend up or down.
Rising volume trend
The slope of the volume line
found using linear regression was upward. The following patterns performed better
with a rising volume trend from the start
of the chart pattern to the end. There are 30 chart pattern variations listed.
| Chart Patterns in a bull market |
| Big W, up breakouts |
| Broadening bottoms, downward breakouts |
| Broadening formations, right-angled and descending, up or down breakouts |
| Broadening wedges, descending, down breakouts |
| Diamond bottom, up or down breakouts |
| Diamond top, up breakouts |
| Head-and-shoulders bottoms, complex |
| Head-and-shoulders tops |
| Head-and-shoulders tops, complex |
| Horn bottoms |
| Island reversals, up breakouts |
| Pennants, up breakouts |
| Rectangle bottoms, up or down breakouts |
| Rectangle tops, down breakouts |
| Rounding bottoms |
| Scallops, ascending, up and down breakouts |
| Scallops, ascending and inverted |
| Scallops, descending, up breakouts |
| Three rising valleys |
| Triangles, ascending, up breakouts |
| Triangles, descending, up breakouts |
| Triangles, symmetrical, down breakouts |
| Triple bottoms |
| Triple tops |
| Wedges, falling, up breakouts |
| Wedges, rising, up breakouts |
Falling volume trend
The slope of the volume line
found using linear regression was downward. The following patterns performed better
with a falling volume trend from the start
of the chart pattern to the end. There are 31 chart pattern variations listed.
| Chart Patterns in a bull market |
| Big W, down breakouts |
| Broadening bottoms, upward breakouts |
| Broadening formations, right-angled and ascending, up or down breakouts |
| Broadening tops, up or down breakouts |
| Broadening wedges, descending, up breakouts |
| Cup with handle, inverted |
| Double bottoms, Adam &Adam |
| Double bottoms, Adam &Eve |
| Double bottoms, Eve & Adam |
| Double bottoms, Eve & Eve |
| Double tops, Adam & Adam |
| Double tops, Eve & Adam |
| Flags, both up and down breakouts |
| Flags, high and tight, both up and down breakouts |
| Head-and-shoulders bottoms |
| Islands, long, up and down breakouts |
| Pipe bottoms |
| Pipe tops |
| Rectangle tops, up breakouts |
| Rounding tops, up breakouts |
| Scallops, descending and inverted |
| Triangles, ascending, down breakouts |
| Triangles, descending, down breakouts |
| Triangles, symmetrical, up breakouts |
| Wedges, falling, down breakouts |
| Wedges, rising, down breakouts |
No Performance Improvement
The following patterns show
no performance improvement when sorted by the volume trend. There are 15 chart
pattern variations listed.
| Chart Patterns in a bull market |
| Broadening wedges, ascending, up or down breakouts |
| Bum-and-run reversal bottoms |
| Bum-and-run reversal tops |
| Cup with handle |
| Diamond top, down breakouts |
| Double tops, Adam & Eve |
| Double tops, Eve & Eve |
| Horn tops |
| Island reversals, down breakouts |
| Pennants, down breakouts |
| Rounding tops, down breakouts |
| Scallops, descending, up or down breakouts |
| Three falling peaks |
-- Thomas Bulkowski
Copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved. A bird in the hand is worth what it will bring.
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