As of 10/15/2021
  Indus: 35,295 +382.20 +1.1%  
  Trans: 15,191 +247.29 +1.7%  
  Utils: 899 -1.55 -0.2%  
  Nasdaq: 14,897 +73.91 +0.5%  
  S&P 500: 4,471 +33.11 +0.7%  
YTD
 +15.3%  
 +21.5%  
 +3.9%  
 +15.6%  
 +19.0%  
  Targets    Overview: 10/14/2021  
  Up arrow35,600 or 33,500 by 11/01/2021
  Up arrow15,450 or 14,000 by 11/01/2021
  Up arrow925 or 860 by 11/01/2021
  Up arrow15,400 or 14,200 by 11/01/2021
  Up arrow4,600 or 4,250 by 11/01/2021
CPI (updated daily): Arrows on 10/8/21
As of 10/15/2021
  Indus: 35,295 +382.20 +1.1%  
  Trans: 15,191 +247.29 +1.7%  
  Utils: 899 -1.55 -0.2%  
  Nasdaq: 14,897 +73.91 +0.5%  
  S&P 500: 4,471 +33.11 +0.7%  
YTD
 +15.3%  
 +21.5%  
 +3.9%  
 +15.6%  
 +19.0%  
  Targets    Overview: 10/14/2021  
  Up arrow35,600 or 33,500 by 11/01/2021
  Up arrow15,450 or 14,000 by 11/01/2021
  Up arrow925 or 860 by 11/01/2021
  Up arrow15,400 or 14,200 by 11/01/2021
  Up arrow4,600 or 4,250 by 11/01/2021
CPI (updated daily): Arrows on 10/8/21

Links to Busted Chart Patterns

 

Revised 12/29/2020.

The third edition of this book Encyclopedia of Chart PatternsEncyclopedia of Chart Patterns. has a table in most chapters discussing busted pattern performance.

$ $ $

Links To Busted Chart Patterns

Busted performance. A comparison to themselves and other chart patterns.

  1. Busted ascending triangles
  2. Busted descending triangles
  3. Busted double bottoms
  4. Busted double tops
  5. Busted head-and-shoulders Bottoms
  6. Busted head-and-shoulders Tops
  7. Busted rectangles
  8. Busted symmetrical triangles
  9. Busted triple bottoms
  10. Busted triple tops

Table of Contents

 

Updated Releases

What Are Busted Chart Patterns?

A busted chart pattern is one in which price breaks out in one direction from a chart pattern, but moves no more than 10% before reversing and breaking out in the new direction. A "breakout" means a close above the top or a close below the bottom of a chart pattern. This measure is used so that all busted chart patterns can be compared on an apples-to-apples basis.

The idea behind a busted chart pattern is that the move is often stronger from a failed chart pattern than from one that works. For example, in my book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, the average rise from 286 triple bottoms in a bull market is 37%.

The average rise from 145 failed triple tops in bull markets, is 42%.

Why does better performance happen? I can only guess at the cause. Perhaps you have heard of the belief that the market likes to confound the most people. If everyone expects the market to drop, it rises instead. A triple top is supposed to break out downward, and it does. But when the drop is meager and price rises, it takes on a life of its own and soars.

Unfortunately, like all market techniques, busted chart patterns are not perfect, meaning that they fail to perform as expected, too.

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Busted Pattern Elements

All busted chart patterns share these elements, but the benchmarks are arbitrary, set by me years ago.

Examples of busted chart patterns are included in the links above.

Busting a Bust?

A chart pattern can bust multiple times. For example, price breaks out downward then soars and busts out upward, reverses and moves lower for a double bust. If it drops no more than 10% before shooting upward and closing above the top of the pattern, it's a triple bust. This type of up and down motion can continue for months.

How often does it occur? Research using triple tops shows that single busts happen 19% of the time. Double and triple busts occur 1% of the time, each. A triple bust includes those busting three or more times.

-- Thomas Bulkowski

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Other Busted Examples

See Also

 

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My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Encyclopedia of Candlestick Charts Trading Classic Chart Patterns

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