As of 09/29/2023
Indus: 33,508 -158.84 -0.5%
Trans: 14,969 -17.13 -0.1%
Utils: 817 +1.02 +0.1%
Nasdaq: 13,219 +18.04 +0.1%
S&P 500: 4,288 -11.65 -0.3%
|
YTD
+1.1%
+11.8%
-15.6%
+26.3%
+11.7%
|
 34,500 or 33,150 by 10/15/202315,500 or 14,200 by 10/15/2023880 or 800 by 10/15/202313,750 or 12,700 by 10/15/20234,425 or 4,175 by 10/15/2023 |
As of 09/29/2023
Indus: 33,508 -158.84 -0.5%
Trans: 14,969 -17.13 -0.1%
Utils: 817 +1.02 +0.1%
Nasdaq: 13,219 +18.04 +0.1%
S&P 500: 4,288 -11.65 -0.3%
|
YTD
+1.1%
+11.8%
-15.6%
+26.3%
+11.7%
| |
|
34,500 or 33,150 by 10/15/202315,500 or 14,200 by 10/15/2023880 or 800 by 10/15/202313,750 or 12,700 by 10/15/20234,425 or 4,175 by 10/15/2023 | ||
This article compares the performance of small chart patterns.
I don't have a definition of what a "small" chart pattern is, but I include those that are a few bars wide.
The longest, is the NR7, which is seven bars long.
| Pattern Name | Average Gain | Percent Wins | Hold Time | Rank |
| Downside weekly reversals | $132.39 | 60% | 36 | 1 |
| Open-close reversal, uptrend | $118.67 | 59% | 31 | 2 |
| Key reversal, downtrend | $95.28 | 58% | 28 | 3 |
| Wide ranging day downside reversal | $92.04 | 58% | 29 | 4 |
| Open-close reversal, downtrend | $90.31 | 58% | 30 | 5 |
| Outside Days | $90.16 | 58% | 29 | 6 |
| Narrow range 4 | $89.20 | 58% | 30 | 7 |
| Upside weekly reversals | $84.58 | 57% | 36 | 8 |
| Hook reversal, downtrend | $81.50 | 57% | 26 | 9 |
| Inside Days | $79.82 | 38% | 28 | 10 |
| Narrow range 7 | $78.79 | 57% | 31 | 11 |
| Wide ranging day upside reversal | $75.98 | 56% | 27 | 12 |
| Hook reversal, uptrend | $75.95 | 57% | 28 | 13 |
| 3L-R | $75.93 | 57% | 26 | 14 |
| Pivot point reversal, uptrend | $73.56 | 57% | 29 | 15 |
| Key reversal, uptrend | $71.11 | 56% | 30 | 16 |
| Pivot point reversal, downtrend | $71.03 | 56% | 28 | 17 |
| Shark-32 | $69.55 | 56% | 26 | 18 |
| Inverted gap2H | $65.44 | 56% | 29 | 19 |
| One day reversal, bottom | $61.35 | 56% | 27 | 20 |
| Gap2H | $56.08 | 55% | 28 | 21 |
| One day reversal, top | $46.12 | 54% | 29 | 22 |
| Closing price reversal, downtrend | $0.09 | 52% | 28 | 23 |
| Pattern Name | Average Gain | Percent Wins | Hold Time | Rank |
Table 1 shows the performance of small chart patterns based on the average gain.
In the tests of each pattern, I used a 7% gain for the profit exit and a 7% drop as the loss exit. In other words, after entering a trade, I set a profit target of 7% above the entry price. If the stock climbed 7%, the stock was sold for a 7% gain less $20 round trip commissions ($10 each way).
If the stock broke out upward but then dropped, the position was sold if the stock dropped 7% from the buy price. Averaging the results for all trades using the pattern gave the average gain, which I show.
The percent wins column is the percentage of times the chart pattern won.
The hold time is the duration of the trade, in calendar days.
The rank is a number for 1 (best), sorted by the average gain.
As the table shows, small patterns are not huge winners. Each trade began with $10,000, so they won $680 or lost $720 (it should be $700 each except for commissions and slippage).
Trades could make more or lose more if the stock gapped higher or lower.
Notice that the average gain is tiny -- $132 -- compared to $700 (a 7% gain).
| Pattern Name | Average Gain | Percent Wins | Hold Time | Rank |
| Wide ranging day downside reversal | ($35.77) | 46% | 24 | 1 |
| Upside weekly reversals | ($40.89) | 47% | 29 | 2 |
| Open-close reversal, downtrend | ($47.93) | 45% | 28 | 3 |
| Wide ranging day upside reversal | ($53.46) | 46% | 25 | 4 |
| Narrow range 7 | ($55.52) | 45% | 25 | 5 |
| Pivot point reversal, downtrend | ($55.99) | 45% | 26 | 6 |
| Hook reversal, downtrend | ($58.02) | 45% | 24 | 7 |
| Narrow range 4 | ($62.95) | 44% | 26 | 8 |
| One day reversal, bottom | ($69.57) | 44% | 24 | 9 |
| Inverted 3L-R | ($72.32) | 44% | 25 | 10 |
| Gap2H | ($72.55) | 44% | 23 | 11 |
| Inside Days | ($75.73) | 43% | 25 | 12 |
| Shark-32 | ($76.36) | 43% | 23 | 13 |
| Open-close reversal, uptrend | ($76.87) | 43% | 28 | 14 |
| Outside Days | ($77.81) | 43% | 27 | 15 |
| Hook reversal, uptrend | ($77.94) | 43% | 26 | 16 |
| Inverted gap2H | ($84.45) | 43% | 24 | 17 |
| Key reversal, downtrend | ($88.09) | 43% | 25 | 18 |
| Pivot point reversal, uptrend | ($96.35) | 42% | 26 | 19 |
| One day reversal, top | ($97.80) | 42% | 28 | 20 |
| Key reversal, uptrend | ($108.82) | 41% | 27 | 21 |
| Downside weekly reversals | ($135.13) | 40% | 33 | 22 |
| Closing price reversal, uptrend | ($137.97) | 39% | 27 | 23 |
| Pattern Name | Average Gain | Percent Wins | Hold Time | Rank |
Table 2 uses the same method as Table 1 except that the patterns listed had downward breakouts. That is, all trades began with $10,000. All shorted the stock and looked for price to drop 7% in a bull market. If it did not, a stop placed 7% above the entry price closed out the trade for a loss.
Commissions were $10 per trade or $20 round trip.
In this case, the average gain column actually shows a loss on every pattern! In other words, none of the chart patterns made money by shorting the stock.
-- Thomas Bulkowski
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