Bulkowski's Trading Pattern Pairs

The pattern pairs chosen for this trade are a double bottom and a double top.

Buy the double bottom which appears at AB. Placing a buy stop a penny above the top of the pattern (C) gets you into the trade at 7.18. Hold until the first double top appears. That happens at DE. Place a stop order a penny below the bottom of the double top (F), and it fills at 10.66. Gain on this trade was 48% in about 6 months.

A head-and-shoulders bottom appears at LS (left shoulder), head, and RS (right shoulder). The red neckline usually provides the buy signal, but I chose to use the right armpit as a more conservative entry signal (trying to determine the price of the diagonal red line is difficult). Place a buy order a penny above D and it fills at 22.94.

The exit signal appears as triple top ABC (which is also an ascending triangle). At E, price hits a stop loss order placed a penny below the bottom of the chart pattern and fills at 26.35.

This trade made 15% in less than 6 months (Note: I purposely chose buy and sell signals that fit on one chart for all three trades shown in this article).

Here we have a buy signal as triple bottom ABC. Entry is a penny above the top of the chart pattern, D, at 169.76.

For the sell signal, we use a double top, DE. The sell order is a penny below the bottom of it but because price gapped open lower at F, it filled at 139.20.

This trade lost 22% in less than 4 months.

Note that this is a bottom fishing trade where the triple bottom is supposed to call the turn. It does, but not for long. The chart shows price trending lower throughout the trade.