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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
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Bulkowski's Congestion Quiz

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 08/18/2017
21,675 -76.22 -0.4%
9,095 -57.14 -0.6%
738 3.96 0.5%
6,217 -5.38 -0.1%
2,426 -4.46 -0.2%
YTD
9.7%
0.6%
11.9%
15.5%
8.3%
Tom's Targets    Overview: 08/14/2017
22,250 or 21,500 by 09/01/2017
9,700 or 8,900 by 09/01/2017
750 or 710 by 09/01/2017
6,500 or 6,150 by 09/01/2017
2,525 or 2,425 by 09/01/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

This article is a quiz designed to test your knowledge of breakouts.

Two ascending triangles on the daily scale

Look at the chart of two fictitious ascending triangles on the daily scale. The triangle is outlined in blue with a horizontal top trendline and an up-sloping bottom trendline. Both A and B show upward breakouts but there is a difference between the two charts.

Which setup (A or B) represents the best trading opportunity?

The difference, if you didn't find it, is in the five days leading to the breakout. In A, price makes a straight-line run but in B, price runs into a congestion area in the five days before the breakout.

I proved in a study that the differences between trading a chart pattern with a straight-line run (A) and a congestion area (B) is not huge. In the straight-line run, on average, the rise after the breakout will be further, but the risk of failure increases, too. Throwbacks will occur more often and that is usually a bad thing.

When looking for chart patterns, trade those with a congestion area forming just before the breakout. If a straight-line run appears, then consider waiting for a throwback to occur and complete. Once price starts moving up again, then enter the trade.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. You worry too much about your job. Stop it. You're not paid enough to worry.