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Visual Guide to Chart Patterns by Thomas N. Bulkowski

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Busted Pattern Sell Signals   

Every trader or investor makes mistakes in their stock selections. Even seasoned pros take their eyes off the ball and strike out. How you handle the scenarios that follow can mean the difference between a losing game or one that ends your career.

As you will recall, a busted pattern (for upward breakouts) occurs when price breaks out upward, rises less than 10 percent, and then tumbles far enough that price closes below the bottom of the chart pattern.

To show that would give away too much of the price action. Let us assume that an adverse breakout represents a busted chart pattern in the exhibits that follow. ...

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