If price dropped into aīear market while in the trade, that was fine. If the breakout from the chart pattern was in a bear market, I excluded the trade because I only wanted bull market results. The first chart pattern appeared in July 1991 and the last in October 2018, giving me 14,865 trades. Sell signal: Downward breakouts from various bearish chart patterns (or busted bullish patterns) provided the sell signal.The stop was not raised, but I did test trailing stops separately. Stop loss: A penny below the bottom of the falling wedge served as the stop price.Enter at that price or the opening price, whichever is higher. Place a buy stop a penny above the top of the chart pattern. Entry: Buy at the open the day after price closes above the top trendline.falling wedges provided the buy signal.However, the following analysis does give a real-world flavor for how well you might do trading chart patterns if you follow the pattern pair strategy. So buying an upward breakout from a falling wedge and selling at the double top I cataloged would be different than choosing to sell a different double top. There may be plenty of double tops over the years, for example, that I didn't catalog on the way to the one The databases I built over several decades doesn't identify every chart pattern. Trading Falling Wedges: Entry and Exit Conditions Table 10: Sell the first bearish non-busted pattern which appears.Table 8: Buy falling wedges when the breakout price is above the 50-day or 200-day SMA.Busted patterns do best using a medium-term. Table 7:Buy non-busted patterns with a short-term duration from the trend start.Table 2: Avoid trading using busted patterns.Table 1: Non-busted patterns outperformed busted ones.

Buy a busted falling wedge and sell a Adam & Adam double top ($6.88) Buy a busted falling wedge and sell a busted broadening top ($7.13)

I put the expected profit per trade, per share, in parenthesis. Trades and how much money you might make trading a pattern pair. Expectancy is a way of gauging winning and losing The following list shows the expected performance of chart pattern pairs, ranked by their expectancy. Busted inverted and descending scallop (66%) Here's a list of the top five performing sell signals, based on annualized gain (annualized because the hold time is often years, in parenthesis). On the sale side, you can sell the first bearish chart pattern which comes along or wait for your favorite bearish chart pattern to appear and sell then. This articles assumes you buy an upward breakout from eitherĪ falling wedge or a busted one (price breaks out downward, drops no more than 10%, reverses, and closes above the top of the wedge). The figure illustrates the idea for trading pattern pairs, where price is the red line and the boxes are chart patterns. Results: Non-Busted Buy, Non-Busted Sale.Along the way, you give price a chance to rise far enough to overcome those trades which are The broadening bottom, hold for a few years, and sell when a double top appears and breaks out downward. The idea behind pattern pairs is to pick a chart pattern type (like broadening bottoms with upward breakouts) to buy and another to sell (like double tops).

Bulkowski on Pattern Pairs: Falling Wedges

Falling wedge stock