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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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Bulkowski's Pattern Frequency Study

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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 01/18/2017
19,805 -22.05 -0.1%
9,141 41.29 0.5%
664 -0.93 -0.1%
5,556 16.92 0.3%
2,272 4.00 0.2%
YTD
0.2%
1.1%
0.6%
3.2%
1.5%
Tom's Targets    Overview: 01/18/2017
19,250 or 20,250 by 02/01/2017
8,800 or 9,500 by 02/01/2017
685 or 630 by 02/01/2017
5,700 or 5,400 by 02/01/2017
2,200 or 2,350 by 02/01/2017
Indus strength: None YTD
Mutt Losers: None YTD
Mutt Winners: None YTD

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.

My book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., described 63 chart and event patterns, including performance statistics.

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How often does a chart pattern appear? To answer that, I scanned my database of 500 stocks during the bull market of July 1991 to July 1996. Here are the results of the top five frequently appearing chart patterns for up and down breakouts.

 

Upward breakouts: 1 is most common out of 35Average Rise RankFailure Rate RankOverall Rank
1. Pipe bottoms

4 out of 22

5 out of 16

2 out of 23

2. Ascending triangles, up breakout

12

12

17

3. Ascending scallops

16

10

16

4. Head-and-shoulders bottoms

9

3

7

5. Bump-and-run reversal bottoms

9

2

8

For example, pipe bottoms occur most often in the database followed by ascending triangles with upward breakouts, and so on down the list. Each of those patterns have the associated performance rankings, for reference. The rankings had nothing to do with how often a pattern appears.

The average rise measures from the breakout price to the ultimate high before price tumbles at least 20%. Failures are a count of how many chart patterns fail to rise at least 5% after the breakout. The overall rank is the average rise rank plus the failure rate rank plus the change after the trend ends rank (not shown). A rank of 1 is best. Ties were given the same rank.

 

Downward breakouts: 1 is most common out of 34Average Decline RankFailure Rate RankOverall Rank
1. Bump-and-run reversal tops

5 out of 10

10 our to 19

3 out of 20

2. Descending triangles

8

3

10

3. Head-and-shoulders tops

2

14

1

4. Inverted and descending scallops

6

2

6

5. Pipe tops

4

8

4

Top of page   More  

Performance for downward breakouts is the same as upward breakouts, but I looked for the lowest low before price climbed by at least 20%.

To download an Excel spreadsheet of the complete list along with performance data, click here.

-- 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. Any minute now I'll jump in with pointless observations.