1. DOUBLE AND TRIPLE TOPS AND BOTTOMS

3. Successful Chart Trading
Can you trade the pattern
Know your trend
Up, down, or consolidation
Know your time frame
Day trading, swing or position
Have your plan in place
Entry and exit are equally as important

4. REVERSAL VS. CONTINUATION
True double tops and bottoms are rare
The difficulty lies in the fact that most formations that start to look like a double top or bottom in retrospect turn out to be a different pattern
For example an ascending triangle can take on the same look and feel as a double top as the pattern starts to develop
Consolidation at the top can lead to high base not reversal

5. Double Top Formation Breakdown
Calculation of Target: a) Vertical distance from top peak to bottom and subtract from the breakout b) that differential number time Bulkowski’s target numbers or c) half the vertical distance subtracted from breakdown point

6. Distinguishing Characteristics
Length is the most critical
The formation should take at least one month to develop preferably longer
Volume
The volume into the first peak is usually high
Diminishes on the downturn
Picks up on the next up leg but not as high as the first peak
Volume then picks up on the down leg after support is broken
Retracement
Should be at least 10% but preferably >15-20%
Shape of Retracement
The more dull and rounded the more likely chance of double top

7. Pullbacks are common

8. Overall performance rank (1 is best): 2 out of 21
Break even failure rate: 11%
Average decline: 18%
Pullback rate: 59%
Percentage meeting price target: 73%
Note: b/e failure rate-A measure of the number of patterns that fail to rise (upward breakout) or decline (downward breakout) by at least 5%

9. Overall performance rank (1 is best): 4 out of 21
Break even failure rate: 8%
Average decline: 19%
Pullback rate: 61%
Percentage meeting price target: 72%

10. Overall performance rank (1 is best): 13 out of 21
Break even failure rate: 13%
Average decline: 15%
Pullback rate: 64%
Percentage meeting price target: 72%

11. Overall performance rank (1 is best): 15 out of 21
Break even failure rate: 14%
Average decline: 18%
Pullback rate: 59%
Percentage meeting price target: 69%

13. 55.49
48.19
35.75
Good time length, correct volume pattern,13% retracement, target would be

14. Another double top or quadruple top?

15. Usually the more times a pattern hits a resistance/support line- the more it wants to break

16. Role of Intermediate Patterns
3.06
2.52
Good volume pattern and length of time. Retracement a little deep at 30%. Expected target would be 1.8 (3.06- ( =1.26)). Bulkowski’s method would give you a price target of Alternative play within this pattern is to short under 3.93.

18. 35.19
30.34
14% retracement, time frame good-volume a little higher on second leg

20. Beware other support points

21. Overall performance rank (1 is best): 7 out of 21
Break even failure rate: 10%
Average decline: 19%
Pullback rate: 61%
Percentage meeting price target: 40%

23. Resources Stockcharts.com: chart patterns
“Technical Analysis of Stock Trends": Edwards and Magee
Thomas Bulkowski’s site:
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