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Written and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.
For more information on breakout volume, consult my book,
Encyclopedia of Chart Patterns, Second Edition  ,
pictured on the right. Each chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics (including volume), trading tactics, and sample trade. Below is just a sliver of the information contained in the book.
Breakout day volume, when compared to the 30-day average,
helps predict performance after the breakout. This page
looks at the performance of chart patterns after heavy and light volume breakouts.
Heavy volume
Light volume
No volume preference
Heavy Breakout Day Volume
Heavy breakout day volume is characterized by a volume spike that towers above
the preceding month’s worth of volume (see the figure to the right). Most
times you can visually spot
what the average volume will look like and compare it to the breakout day volume.
Breakout day volume that is above average is heavy volume.
Here are the chart patterns in which price performs better, post breakout, when
breakout day volume is above the 30-day average.
| Chart Patterns in a bull market |
| Big W, down breakouts |
| Broadening formations, right-angled and ascending, up and down breakouts |
| Broadening formations, right-angled and descending, down breakouts |
| Broadening wedges, ascending,up and down breakouts |
| Broadening wedges, descending,up and down breakouts |
| Bump-and-run reversal bottoms |
| Diamond bottoms, down breakouts |
| Double bottoms, Adam & Adam |
| Double bottoms, Eve & Eve |
| Double tops, Adam & Adam |
| Double tops, Eve & Eve |
| Head-and-shoulders bottoms, complex |
| Head-and-shoulders tops |
| Head-and-shoulders tops, complex |
| Horn bottoms |
| Pennants, up and down breakouts |
| Pipe bottoms |
| Rectangle bottoms, up and down breakouts |
| Rectangle tops, up breakouts |
| Rounding bottoms |
| Rounding tops |
| Scallops, ascending, up and down breakouts |
| Scallops, ascending and inverted |
| Scallops, descending, up and down breakouts |
| Triangles, ascending, up breakouts |
| Triangles, descending, up and down breakouts |
| Triangles, symmetrical, up and down breakouts |
| Wedges, falling, up and down breakouts |
| Wedges, rising, up breakouts |
Light Breakout Day Volume
Light breakout day volume (reference the figure to the right) is volume that remains below the average
volume over the prior month, and it occurs on the day price breaks out of a chart
pattern. Look to the left on the volume chart and compare the average volume with the
volume level on the chart pattern breakout day. Light breakout day volume will
appear as a short spike below the surrounding volume spikes and below the average
volume level.
Here are the chart patterns that perform better, post breakout, after breakout
day volume that is below the 30-day average.
| Chart Patterns in a bull market |
| Big W, up breakouts |
| Broadening bottoms, up breakouts |
| Broadening formations, right-angled and descending, up breakouts |
| Broadening tops, up breakouts |
| Cup with handle |
| Cup with handle, inverted |
| Diamond bottoms, up breakouts |
| Diamond tops, down breakouts |
| Double bottoms, Adam & Eve |
| Double bottoms, Eve & Adam |
| Double tops, Adam & Eve |
| Double tops, Eve & Adam |
| Flags, up breakouts |
| Flags, high and tight |
| Head-and-shoulders bottoms |
| Pipe tops |
| Three falling peaks |
| Three rising valleys |
| Triangles, ascending, down breakouts |
| Triple bottoms |
| Triple tops |
No Volume Preference
The following patterns show no performance improvement when sorted by heavy or light breakout day volume.
| Chart Patterns in a bull market |
| Broadening bottoms, down breakouts |
| Broadening tops, down breakouts |
| Bump-and-run reversal tops |
| Diamond tops, up breakouts |
| Flags, down breakouts |
| Horn tops |
| Rectangle tops, down breakouts |
| Scallops, descending and inverted |
| Wedges, rising, down breakouts |
-- Thomas Bulkowski
Copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved. A billion here, a billion there, and soon you’re talking real money.
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