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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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My book, Getting Started in Chart Patterns, Second EditionGetting Started in Chart Patterns, Second Edition book., discusses partial rises and declines starting on page 207 in the section conveniently titled, "Partial Rises and Declines." Film at 11:00. I show a picture of the book on the left.

The throwback and pullback discussion in the book begins on page 217 in the section imaginatively titled, "Throwbacks and Pullbacks."

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This article discusses partial rises and declines, throwbacks and pullbacks. Do throwbacks and pullbacks occur more often after partial rises and declines? The research discussed below says no.

 

Partial Rises and Declines

Picture of a partial rise.

Picture of a partial decline.

The two images on the right and left are almost self explanatory, but if you need more information, click on the link to partial rises or partial declines.

Traders see these patterns after broadening tops and bottoms, rectangles (tops and bottoms), and even in some triangles. When they occur, they predict the breakout direction. Partial rises predict an immediate downward breakout and a partial decline means an upward breakout.

Throwbacks and Pullbacks

Picture of a throwback.

Picture of a pullback.

These next pair of images (right and left) are of throwbacks and pullbacks. Throwbacks occur after an upward breakout and pullbacks happen after a downward breakout. Just when you think price is going against you, it turns around and resumes the original breakout direction.

If you are a nimble trader, you can place an order to enter a trade at the breakout price and exit within a few days before the pullback or throwback occurs, capturing the initial move before the reversal occurs. In all chart patterns, throwbacks and pullbacks occur 53% and 56% of the time, respectively, based on research using over 10,000 chart patterns.

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Throws and Pulls More Often?

The reason I bring up all of this is from an email I received several months ago. I don't remember who sent it, but thanks for the idea. He asked the question, does a throwback or pullback occur more often after a partial decline or partial rise? The short answer is no.

I scanned all rectangles and broadening tops and bottoms and found 1,831 examples of those patterns. The following table lists how often the anomalies occur in the samples.

Partial rise28%
Partial decline24%
Throwback24%
Pullback32%

When I add throwbacks and pullbacks without partial rises and declines, I get the following.

Throwback and no partial rise26%
Throwback and no partial decline21%
Pullback and no partial rise13%
Pullback and no partial decline21%

The percentages drop, just as you would expect since the test excludes patterns with partial rises and declines.

Finally, I add partial rises and declines into the picture to get the following.

Throwback and partial rise5%
Throwback and partial decline11%
Pullback and partial rise10%
Pullback and partial decline3%

The table says that there are substantially fewer partial rises and declines that lead to throwbacks and pullbacks. So that's the answer. It's less likely that a throwback or pullback will occur after a partial rise or decline.

-- 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. It's bad luck to be superstitious.