bearish (1 to 32) formations then ranked them by their score. The score is the average rise or decline times the Score Rank by (15-20) 10 Decine

Transcription

1 Statistics Summary and Definitions This summary is an alphabetical list showing performance statistics for the chart patterns covered in this book. Various rankings of the top ten chart patterns follow. Key to the tables: NM = Not material as there were too few to be significant._.._. = Not studied or does not apply to this formation = Numbers in parenthesis are declines * = Unusual values due to low sample count P = T = Explanations of the column headings: Failure rate Percentage of formations that do not work as expected, including % failures. The numbers apply to formations once they stage a (confirming the formation). eversal or consolidation The letter appears if the majority of formations act as reversals of the price trend and the letter appears for consolidations. If both and appear in an entry, then the chart pattern has no overriding majority of either type., pullback A is an upside that returns prices to the top of the formation or boundary. A pullback is a downside that returns prices to the bottom of the formation or trendline boundary. Both occur after a and return within days. The percentages for apply to formations with upside s only; pullback percentages apply to downside s only. Statistics Summary rise or decline I typically measure the average rise or decline from the price on the day (using the daily high or low) that is closest to the formation. The ultimate high or low is the highest or lowest point before a significant change in trend (typically a % price change, measured high to low). rise or decline omputed by measuring the individual percentage rise or decline for each formation and tabulating a frequency distribution of the results. The most likely rise or decline is the range with the highest frequency and usually excludes the rightmost column. ank by score I separated each table entry into bullish (1 to and bearish (1 to ) formations then ranked them by their score. The score is the average rise or decline times the most likely rise or decline divided by the failure rate. The best rank is Summary of Statistics for All hart Patterns eversal Failure or ate onsoli- dation ise or ise or ank by Broadening Bottom, down Broadening Bottom, up Broadening, ight-angled and down 9 Broadening, ight-angled and Ascending, up Broadening, ight-angled and Descending, down Broadening, ight-angled and Descending, up 9 Broadening Top, down Broadening Top, up Broadening Wedge, Ascending P T, P () (1) () () () (-) () (-) - (-) () (continued)

2 Statistics Summary Statistics Summary Summary of Statistics for All hart Patterns (continued) Summary of Statistics for All hart Patterns (continued) Broadening Wedge, down Broadening Wedge, Descending, up eversal Bottom Bump-and-un eversal Top up with Handle Dead-at Bounce Diamond Bottom Diamond Top Double Bottom Double Top Flag, downtrend Flag, uptrend Flag, High and Tight ap Hanging Man, down Hanging Man, up Bottom Head-and-Shoulders Bottom, omplex Head-and-Shoulders Top, omplex Head-and-Shoulders Top Horn Bottom Horn Top Inside Day, down Inside Day, up Island eversal, bottom Island eversal, top Failure ate eversal or onsolidation Pullback P 9 T ise or () () ) (1) () () Varies (1) () () (1) () 1 (1) ise or () (-) - (-) () - (-) () * - Varies (-) - - () () - () (-) - () ank Measured Move Down Measured Move Up One-Day eversal, bottom One-Day eversal, top Outside Day, down Outside Day, up Pennant, downtrend Pennant, uptrend Pipe Bottom Pipe Top ectangle Bottom, down ectangle Bottom up ectangle Top, down ectangle Top, up ounding Bottom ounding Top Scallops, Ascending Scallops, Descending Shark-, down Shark-, up Triangle, Ascending Triangle, Descending Bottom, down Bottom, up Top, down Top, up Failure ate eversal or onsolidation Pullback P T1 P ise or () () ) () 1 (1) () () 1 () (1) () () 1 () ise or (-) - () () - (-) () () () () ank (continued)

3 Statistics Summary Statistics Summary 9 Summary of Statistics for All hart Patterns (continued) Top Ten Best Performing Bearish s, Sorted by Triple Bottom Triple Top Wedge, Falling Wedge, ising Weekly eversal, downside Weekly eversal, upside Bullish pattern average Bearish pattern average Failure ate eversal or onsolidation Pullback ise or (1) () (1) ise or - () () (1) ank In the following tables, I do not include the measured move up and measured move down formations because the average gain or loss is unrealistic. I calculated the returns assuming an investor notices the formation at the start of the chart pattern when a more realistic interpretation gauges results from the corrective phase (or the length of the second leg). In short, the average gain for a measured move up is probably about %, instead of %, and for the measured move down, expect an average loss of % instead of %. 1 1 Scallops, Descending Triangles, Symmetrical Bottoms, down Broadening Tops, down Broadening s, ight-angled and Descending Broadening Bottoms, down Triangles, Descending Tops, omplex ectangle Bottoms, down 9 Triangles, Symmetrical Tops, down Head-and-Shoulders Top Note: The score column results from dividing by the failure rate. (%) multiplying the average loss times the likely Top Ten Bullish s with Lowest Failure _ ates loss and Top Ten Best Performing Bullish s, Sorted by 1 ectangle Tops, up Wedges, Falling Triangles, Ascending Double Bottoms Triangles, Symmetrical up ounding Bottoms ounding Tops Triple Bottoms 9 Bottoms Bottoms, omplex ise 1 1 ise Note: The score column results from multiplying the average gain times the likely gain and dividing by the failure rate ectangle Bottoms, up Tops, up Triangles, Ascending Wedges, Falling Broadening Bottoms, up Triangles, Symmetrical Bottoms, up Double Bottoms Triple Bottoms 9 Broadening Tops, up Triangles, Symmetrical Tops, up ise 1 ise

4 Statistics Summary Statistics Summary 1 Top Ten Bearish s with Lowest Failure ates Top Ten Bearish s with Highest 1 ectangle Tops, down Triangles, Symmetrical Bottoms, down Scallops, Descending Broadening, ight-angled and Descending Broadening Tops, down Triangles, Descending ectangle Bottoms, down Triangles, Symmetrical Tops, down 9 Wedges, ising Broadening Wedges, Ascending (%) Tops, omplex Broadening Bottoms, down Broadening Wedges, Descending, down eversal Tops Scallops, Descending Broadening Tops, down Shark-, down 9 Horn Tops Triple Tops Top Ten Bullish s with Highest ise Top Ten Bullish s with Highest Most ise 1 Flags, High and Tight ounding Bottoms ectangle Tops, up Pipe Bottoms Broadening Wedges, Descending, up ectangle Bottoms, up Weekly eversals, Upside Triangles, Ascending 9 Wedges, Falling Triangles, Bottoms, up 1 ise 1 ise ounding Tops Broadening s, ight-angled and Descending Scallops, Ascending Head-and-Shoulders Bottoms, omplex Horn Bottoms Head-and-Shoulders Bottoms Double Bottoms Wedges, Falling 9 ectangle Tops, up Flags, High and Tight ise 1 ise

5 Statistics Summary Top Ten Bearish s with Highest Most 1 Pennant, trend down * Scallops, Descending Tops, omplex. Diamond Tops 1. Broadening Wedges, Descending, down 1.1 ectangle Tops, down. Broadening Bottoms, down..9 Bump-and-un eversal Tops. 9 Broadening Tops, down. Triangles, Descending.1 Index of hart Patterns Broadening Bottoms, 1 Broadening Broadening s, and Ascending, Broadening Wedges, Descending, Broadening s, ight-angled and Descending, Bump-and-un eversal Bottoms, Broadening Tops, Bump-and-un eversal Tops, 1

6 Index of hart Patterns up with 1 Dead-at Diamond Bottoms, Diamond Tops, Double Bottoms, Double Tops, Flags, Flags, High and Tight, Gaps, Hanging Man, Bottoms, Head-and-Shoulders Bottoms, omplex, Index of hart Patterns Head-and-Shoulders, Tops, Island eversals, Tops, Head-and-Shoulders Tops, omplex, Measured Move Down, 9 Measured Move Up, Horn Bottoms, Horn Tops, One-Day eversals, Bottoms, 9 Inside Days, One-Day Tops, 9 Island eversals, Bottoms, Outside Days,

7 Index of hart Patterns Pennants, Tops, Pipe Bottoms, Scallops, Ascending, Pipe Tops, 9 Scallops, Descending, ectangle Bottoms, 9 Shark-, 1 ectangle Tops, Triangles, Ascending, Bottoms, Triangles, Descending, 9 Index of hart Patterns Triangles, Symmetrical Bottoms, Wedges, Falling, Triangles, Symmetrical Tops, Wedges, ising, Triple Weekly eversals, Downside, Triple Tops, 9 Weekly Upside, I