getting started in chart patterns - bulkowski 2006

[...]... the counter blowing cool air in the summer heat The grandfather clock in the far corner is ticking loudly; every 15 minutes it tolls The cardinal in the bushes outside my window has a distinctive high-pitched chirp that tells his mate where he is and that he’s still alive The bearings in my windmill are no longer smooth; as the propeller spins, it rivals the grandfather clock in its ticking Focus on the... (the falling wedge), or it can show a price trend (trendline A and B) Trendlines indicate buying or selling opportunities when price crosses them External Trendlines Trendlines come in three flavors: external, internal, and curved External trendlines are straight lines drawn so that the line rests on the peaks or grips the bottom of valleys Figure 3.2 shows an external trendline Upsloping trendlines connect... rattler hissing “Tell me everything you know about trendlines.” Trendlines: External, Internal, and Curved If you look at almost any price chart, your eyes will find prices that zigzag but still follow an imaginary path That path is called a “trend.” If you draw a line connecting the peaks or valleys along that trend, you get a trendline A trendline can outline a chart pattern as it does in Figure 3.1... a winning trade in so long you’re sure this one is going to be the big winner You buy large and pump additional money into the position, tying to prop up the stock single-handedly I’ve tried supporting a stock It doesn’t work because the market has other plans I turned to Jake He was fidgeting in the chair because he knew what I was going to ask 3 Chapter The Truth about Trendlines ere’s that financial... Figure 3.1 shows what he was looking at The two lines surrounding the falling wedge slope downward, joining at the wedge apex sometime in the future Volume also slopes downward as it does in many chart patterns Breakout day volume—the day price closes above the top pattern line—is high, but not worth writing home about The upward breakout confirmed the falling wedge as a valid chart pattern and signaled... 44 Internal Trendline 42 40 38 36 Downsloping Trendline 34 32 30 28 26 24 External Trendline 22 20 18 16 1 M A M J J A SO N D02 F M A M J J A S O N D03 F M A M J JA SO ND04 FMA MJ J ASO 14 FIGURE 3.2 Shown on the weekly scale are the three types of trendlines: external, internal, and curved The curved trendline highlights an ascending and inverted scallop chart pattern The downsloping trendline beginning... Just by thinking about it, I can shift my focus from sound to sound, emphasizing one and diminishing others Why not do the same with your thoughts? Instead of dwelling on how the trade that you are about to make will lose money, visualize a winning trade Think of how you will feel watching the stock double in price Focus on what you want to happen Visualize how great you’ll feel with a big winner and... adding bells and whistles to the extent that he has forgotten the point of the exercise: to make money using the system Locked inside of the comfort zone, he is unwilling to bust out and play the game Another trader perceives himself as a successful trader He takes profits early Instead of aggressively moving into a trade, he hesitates If he doesn’t trade, he can maintain his winning image by not losing... look back There are other chart patterns begging for your attention like abandoned puppies in an animal shelter What would have happened if I decided to hold on? By ignoring a sell signal and having a winning trade, I would be reinforcing negative behavior I would question each sell signal and my losses would grow in step with trading anxiety Obey the signals Obey your trading signals and don’t let... publishing a book easy and fun Almost Thanks to Bernice Pettinato at Beehive Production Services for proofreading the book I am indebted to Lt Colonel James Bulkowski for acting as my support group Thanks brother And keep your head down in Iraq should you find yourself there I Regarding Serious Inquiries If you would like to contact me, e-mail me at tbul@hotmail.com Make sure you fill in the subject line . Cataloging -in- Publication Data: Bulkowski, Thomas N., 195 7- Getting started in chart patterns / Thomas N. Bulkowski. p. cm. Includes index. ISBN-13: 97 8-0 -4 7 1-7 276 6-8 (pbk.) ISBN-10: 0-4 7 1-7 276 6-0 1 Hill Getting Started in 401(k) Investing by Paul Katzeff Getting Started in Internet Investing by Paul Katzeff Getting Started in Security Analysis by Peter J. Klein Getting Started in Global Investing. Gelb Getting Started in Online Investing by David L. Brown and Kassandra Bentley Getting Started in Investment Clubs by Marsha Bertrand Getting Started in Internet Auctions by Alan Elliott Getting