‘Trendy’ Chart Patterns by Thomas Bulkowski
May The Best Pattern Win
Which chart patterns precede a strong breakout move?
Find out here.
I never associate chart patterns with being trendy, but when
I received an email asking me which chart patterns are
trendiest, I had to think twice.
What is a trendy chart pattern?
A chart pattern is trendy if price forms the first minor high
or low well after a breakout. In other words, if price changes from moving sideways (consolidating in the chart pattern)
to moving up or down (after the breakout), then a new trend
has begun. The chart pattern with the highest percentage gain
(upward breakout) or loss (downward breakout) to the first
minor high or low, respectively, after the breakout, becomes
the trendiest; it leads to the strongest trends.
To determine which pattern is the trendiest, you need only
measure from the breakout of a chart pattern to the first minor
high or low, sort the results, and you will have a list of the
trendiest chart patterns. Those chart patterns showing the
highest percentage runs to the first minor high or low are the
For downward breakouts, I used the same database
and a similar technique to find the first minor low
after the breakout from a chart pattern. The table
in Figure 4 shows the results for the top 10 chart
patterns with downward breakouts. The head &
shoulders top, another popular chart pattern, did
not make the top 10. It ranked 22 out of 35.
Notice that diamond bottoms and big W patterns
do not have large sample counts. Big Ws are double
bottoms with tall sides. Instead of price continuing
to rise, it reverses and drops below the bottom of
the pattern, staging a downward breakout. When
that happened in the 92 patterns tested, there was a
strong down move.
If you test using three and 10 days, it will change
the order of the chart patterns to some degree (for
upward breakouts, for example, the top three remain
the same; for downward breakouts, only diamond
bottoms remain first). Separating the chart patterns
into bull and bear markets, using other definitions
for minor highs or lows, or adding more samples
will likely change the order, too.