Wednesday, December 12, 2012

Bulkowski, Visual Guide to Chart Patterns

In general, the Bloomberg visual guides are a conceptual stretch, but Thomas N. Bulkowski’s Visual Guide to Chart Patterns (Wiley/Bloomberg, 2013) is an obvious exception. Charts are by definition visual.

Bulkowski’s books on chart patterns and their statistical characteristics are classics. So why yet another book? First, the Bloomberg visual guides are in color. Second, Bulkowski has updated his statistics through 2011, so we can see how trading off of chart patterns might have performed over a more extended period of time.

Bulkowski deals with the standard fare of charting: minor highs and lows, trendlines, support and resistance, gaps, throwbacks and pullbacks, pattern identification, rectangles, ascending triangles, descending triangles, symmetrical triangles, flags and pennants, double bottoms, triple bottoms, double tops, triple tops, head-and-shoulders bottoms, head-and-shoulders tops, basic buy setups, failures, the throwback buy setup, measuring flags and pennants, busted pattern buy setups, trading setups and tips, chart pattern sell signals, busted pattern sell signals, triangle apex sell signal, trendline sell signals, swing rule, and—finally—a tale of two trades.

But Bulkowski writes in a light-hearted, often humorous way that should prevent even the least engaged reader’s eyes from glazing over. The book also includes exercises and tests to keep the reader on track.

If you’re an accomplished chartist, you don’t need this book (unless a little levity would cheer you up). But if you’re new or relatively new to the game, it’s a perfect introduction.

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