Bulkowski's Three Falling Peaks Quiz

Numbers 1, 2, and 3 identify three falling peaks. That's the name of a chart pattern. This example confirms as a valid chart pattern when price closes below the lowest valley between the three peaks. I show that at A. Look for three similar appearing peaks: all tall or all short, all narrow or all wide. I'm not sure it matters if you mix them, but I tried to find similar looking ones when I did my research. The three peaks don't have to be separated by similar amounts nor do they have to appear along a line of trend. If you look at most charts, you'll soon see a gazillion of these pattern. Let's test your ability to find them in the next slide to find valid three falling peak patterns.

Find as many three falling peaks as you can. For help, click here.

I show two of the 3 falling peak patterns. The first is at 123 and the second is at 345. I forgot to mention that each succeeding peak must be below the prior one. These two patterns confirm at A and B, respectively. Usually I don't like to nest these patterns (sharing peak 3), so you can pick the next peak after 5 if you wish to have a separate 3FP. However, it doesn't show confirmation on this chart. Let's try again in the next slide.

Find as many three falling peaks as you can.

Here I show two distinct 3 falling peak patterns: 123 and 456. The horizontal red lines confirm the patterns when price closes below them. Let's try trading one in the next slide.

The three falling peaks pattern appears as 123. It breaks out downward on the last price bar shown on the chart (at A, but the red line should be drawn a bit lower). How far will price drop? Pick the line closest to where you think the stock will reverse: B, C, D, or none of the above. The next slide shows the answer.

Although line D shown here is below the bottom of the prior chart, if you guessed line D, you'd be closest to being correct.