Busted Pattern Buy Setups
“Busted chart patterns” is a phrase I coined to help model the behavior of chart patterns when things go wrong. If price breaks out in one direction, quickly reverses, and then trends, it busts the breakout. Unfortunately, the busted ride can become a rollercoaster when a stock busts and busts again as it struggles to determine a trend direction.
Years ago, I was looking at chart patterns that failed to perform as expected when I noticed something unusual. Ascending triangles, for example, would break out downward and then reverse to begin a new trend that saw price soar like a glider in a thermal. “I can make money ...
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