Rating: - Excellent Reference Work
As co-author of "The Encyclopedia of Trading Strategies" and "How to Start Day Trading Futures, Options, and Indices," I highly recommend Bulkowski's excellent book. I first came across it while killing some time in a bookstore and couldn't put it down, nearly missed my appointment. His research was up to the rigorous standard I set for myself. He was comprehensive and his reporting was easy to understand. Anyone trading on the basis of visually identified chart patterns should not think twice about buying this book--it is a must have for their trading arsenal.

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Rating: - Excellent Reference Work
As co-author of "The Encyclopedia of Trading Strategies" and "How to Start Day Trading Futures, Options, and Indices," I highly recommend Bulkowski's excellent book. I first came across it while killing some time in a bookstore and couldn't put it down. His research was rigorous, and his reporting comprehensive and easy to understand. Anyone trading on the basis of visually identified chart patterns should not think twice about buying this book--it is a must have for their trading arsenal.

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Rating: - Finally...
After reading Tom's article in the recent Technical Analysis of Stocks and Commodities magazine, I knew I had to see his book. Finally it seems that someone is actually testing chart patterns for success/failure rates.

While his definitions for the patterns and for the failure rates are subjective, they are at least consistent and allow for a base line for comparison with any future studies. This, in itself, sets it apart from anything previously published. With definite rules, one can't look back at a pattern in hindsight and claim something different (as is too common among chartists).

I'd still love to sit and pick his brain over some specifics, but I see it as a tremendous leap in the level of what is available on chart patterns and their predictability.

The amazingly low failure rates listed on some of the patterns are based on entry *after* a breakout of the pattern. The "too good to be true" aspect of this is then greatly tempered by the relatively great distance this puts one from the recommended "stop" levels.

It will take some testing of my own to learn what kind of "expectancy" can be dragged out of these numbers. It will also be fun to learn whether the stats hold for intraday charts.

His emphasis on the rates of "pullbacks" and "throwbacks" (and definitions of same) was a surprising and valuable bit of added information. With the right indicators, this knowledge just might find one some significantly safer entry points with closer stops.

One thing that stumps me is the absence of the opening prices on the bars of the charts. Did I detect a bias against candlesticks?

I haven't been at this long enough to have enough data to even know if this charting and technical analysis stuff can really be made to work long term, but this book should at least make it a lot more fun to find out. Sure must have been a lot of work.

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Rating: - A stunning achievement, a classic
This book is a must-have for anyone interested in technical analysis, whether just starting out or more experienced. It is a thorough review of patterns not seen since Edwards and Magee (1948) and deserves the name "encyclopedia". The author takes a scientific approach and does not make "claims" for one pattern or another, as a critical reviewer states. He clearly acknowledges that patterns, as with any technical method, only indicate, they do not dictate, and we are always working with probabilities. The back-testing that yields statistics on pattern performance (failure rate, average gain, etc.) is useful, but best of all is the absolutely clear description of the patterns with identification guidelines. Of the 100 or so books on technical analysis on my bookshelf, this is far and away the most-consulted. I have been using statistics-based technical analysis for over 20 years (moving averages, stochastics, and the like), but increasingly see patterns like double tops, triangles, etc. This book is an invaluable adjunct to software-generated statistics-based technical analysis. I am a professional financial writer on technical analysis as well as a money manager.

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Rating: - Author's Defense!
Let me thank Barry Rudd and others for coming to my defense.

I measure the failure rate in two ways. First, when a pattern fails to perform as expected, it's logged as a failure. Also, and I thought this a unique approach, when a pattern fails to travel in the expected direction by more than 5%, it too is a failure. Both methods are combined to form the published failure rate. With some reader comments, the second benchmark is too low. Perhaps 10% or 15% would be a more realistic gauge. I agree.

If you distrust the failure rate, look at the statistical summary (a large table of important stats) starting on page 654. That's where you can compare each of the nearly 70 pattern variations against one another. Trade the ones that perform best and ignore the rest.

As to the hanging man chapter: No excuses. I blew it. The small picture at the chapter start is incorrect according to the traditional definition of a hanging man.

On page 10 of the book, near the bottom, in bold type is "The Sample Trade." The paragraph explains that the sample trades are mostly fictitious and are used as literary devices so that you may learn from the case study.

Too wordy? Well, I'll work on that. The publisher says it's selling well enough to be translated into other languages, so I may have another chance to fix these problems in a second edition (many years away, if ever). Thanks to everyone for pointing out the problems.

Please direct any questions or comments to me: Tom Bulkowski tbul@hotmail.com. Tell me how I can make the book better!