Subscribe to RSS feeds Bulkowski Blog via RSS

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

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.

Bulkowski's Trading Notebook

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/27/2017
20,551 -45.74 -0.2%
8,935 6.33 0.1%
702 -3.50 -0.5%
5,840 11.63 0.2%
2,342 -2.39 -0.1%
YTD
4.0%
-1.2%
6.5%
8.5%
4.6%
Tom's Targets    Overview: 03/14/2017
20,100 or 21,250 by 04/15/2017
8,500 or 9,500 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,275 or 2,425 by 04/15/2017
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.

The following are notebook entries that I make for each trade. They describe why I bought a stock and, more importantly, serve as a checklist of things to examine before I buy. Completing a notebook entry takes less than an hour. It includes reading several research reports, checking the intraday price action and looking at other stocks in the industry.

I place the following (red highlight) in my trading notebook before each trade and use it as a checklist to make sure I haven't forgotten anything. Some of the items are self-explanatory. For a notepad version of the template, click here

 

Today's date:
Order details: Market, limit, stop, number of shares, price, and so on.
Date Bought:
Stop, % loss: This is the stop price and how far below the purchase price it is. It includes a volatility stop: how volatile is the stock and how far away should the stop be, based on volatility? See Stop Placement for more information on vol stops.
Upside target: The expected target price based on overhead resistance, the measure rule, or other techniques. This is different than the price target created by the scoring system (see 'Score and price target' below)
SAR: Locate support and resistance zones in terms of price.
Next earnings: This makes sure I'm not buying within 3 weeks of an earnings announcement.
Weekly scale (industry, too): What does the intermediate-term picture look like? Is the daily trend in the same direction as the weekly scale? Any interesting chart patterns? How is the industry doing?
Indicators: relative strength index, commodity channel index, and Bollinger bands. I look for overbought/oversold, divergence, and price bouncing off the Bollinger bands, respectively.
Score and price target: Score the pattern according to my book, Trading Classic Chart Patterns and get a price target based upon the median price rise after the breakout. This is different than the above 'Upside target'.
Buy reason:

 


Here's the sell side. These are all self-explanatory.

Date placed:
Date sold:
Shares sold:
Sold at:
Sell reason:

Top

 

The following is an example for ASF. Here is the buy.

Today's date: 11/8/06
Order details: Market order for 500 shares at market open. Filled 200 at 40.64, 300 at 40.58
Date Bought: 11/8/06
Stop, % loss: 36.33, just at the top end of the gap on 11/1/06. That's 10.3% lower. Volatility, stop: $34.43 -12.6%. 2x volatility: $1.98 Minor low stop: 33.08 -16.0% on 10/20/2006
Upside target: 53
SAR: 41 is the first congestion region overhead.
Next earnings: 3 months. Up today (11/1/06) big time on earnings.
Weekly scale (industry, too): Many are either recovering from a swift decline months ago or are making new highs. Six are near the yearly high, 5 in the middle and 1 near the yearly low.
Indicators: RSI: oversold with today's spike. CCI: off scale high, nearly. BB: top of band.
Score and price target: Sym tri Score: 1. Target: 44.19.
Buy reason: Sym triangle breakout with good earnings. Big W breakout.

 


Here is the sale.

Date placed:1/18/2006
Date sold: 1/22/07
Shares sold: 500
Sold at: 40 and 40.01
Sell reason: Hit stop. I thought price would plunge when it fell through support, so I put in a stop. The "flag" was getting to be too loose and too long to believe that price would breakout out upward. With the Dow down today 100+ points, the down draft has sucked this stock lower to 38.95, so I saved myself a ton of bucks.

Looking back on the trade, I can't believe that I bought when I did. This was well beyond the symmetrical triangle breakout price. That was a lousy justification to get in at a lousy price. Yuck.

-- Thomas Bulkowski

Top 

See Also

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. If you can count your money, you don't have a billion dollars. -- J. Paul Getty.