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Visual Guide to Chart Patterns by Thomas N. Bulkowski

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The Throwback Buy Setup

Another setup that some traders prefer is to wait for a throwback to complete before buying. That is especially important if you fail to recognize a chart pattern before the breakout or if price launches upward in a blastoff move that sends the stock into orbit before you can hit the buy button.

Throwbacks occur when price breaks out upward from a chart pattern, but the stock returns to the breakout price or trendline boundary within a month. A check of the data shows that since 2000, a throwback happened 58 percent of the time in 10,305 chart patterns of various types.

The key to the throwback buy setup is to wait for ...

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