84 of 88 people found the following review helpful:
5.0 out of 5 stars
Great Primer or Refresher!, November 14, 2005
This review is from: Getting Started in Chart Patterns (Paperback)
I have been trading the markets since 1998 and as an engineer by trade, am a very visual thinker. In my first years of trading, I read and reread Martin Pring's "Technical Analysis Explained" and Dr. Elder's book "Trading for a Living". Both are excellent and caused me to fall in love with TA.
I bought Bulkowski's book both as a refresher course and out of curiosity for the statistics he provides. It did not disappoint. His extensive research is more than obvious and his writing style hit the mark. It is clear and carries the voice of experience.
According to an independent biography I found on Global Investor, Thomas Bulkowski did in fat quit his day job at age 36 by earning enough from his investments. That says a lot right there. Although the main theme of the book is to present chart patterns with their historical success and failure rates, it offers much more.
For instance, Mr. Bulkowski bares his soul on many occaisions by revealing actual losing trades he's made. These detailed discussions of his thought process in entering and exiting the trade brought back many memories for me; ones I'd like to, but shouldn't, forget. New traders will find these accounts interesting and should pay heed to them. Making money in the markets is not nearly as easy as other books will have you believe. You need to put in the time in research and, if you are a technical trader like me, look at thousands of charts over the course of years.
To punctuate this point, Mr. Bulkowski provides a great chapter called "The Art of Trading - Checklists". In it he throws down his list of "to do" items for preparing and maintaing his trades. Even if you don't follow his routine (you should have your own), you will get a feel for the kind of effort and commitment required to do this business.
As a literary device, the book uses an imaginary trader named Jake. He provides conversation with Bulkowski throughout the book and is definitely the voice of the new trader. The "teacher/student" dialog works well and is very often humorous. Imagine what a challenge it is to write a book on technical analysis with humor. This book succeeds.
As for the meat of the book, statistical analysis of chart patterns, Bulkowski's book has no rivals. I have read many other books on TA, and the pure chart pattern discussion here is the best by far. Refreshingly, very little mention of other indicators is made, although RSI and CCI crop up a couple times. I've used all the indicators at one time or another, and finally realized that they are all based on either price or volume anyway. I'm still not convinced they add value.
As an example of the chart pattern discussions, imagine you were considering trading a double top pattern. When is the right time to get in? What kind of double top is it, anyway? What are the chances of success or a reversal to the breakout line? How does the double top pattern compare to, or rank among, other patterns you could trade? What happens after the breakout, typically? Very good questions, and very good answers provided.
Although I read the book cover to cover, you may find it just as useful to use as a reference. However, I did order Bulkowski's "Encyclopedia of Chart Patterns, 2nd Edition" on the strength of this book.
Summary
If you are an experienced trader looking for a review of chart patterns or a novice trader curious what all those funny pattern names mean, this is your book. It is worth double the price Amazon is selling it for.
Good luck and good trading.
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30 of 31 people found the following review helpful:
5.0 out of 5 stars
A must for a trader, December 17, 2005
This review is from: Getting Started in Chart Patterns (Paperback)
Price of the financial instruments exists in two states: dynamic up or down move ( trend ) or congestion ( more or less horizontal move ). Chart patterns are nothing but these congested areas. Patterns start where trend ends. Unlike other TA tools, chart patterns contain information. But to be able to derive it from the pattern you need to be able to read them. This book is a nice introduction on the patterns from the World-class expert in the field.
I gave this book five stars because no more stars are available. Otherwise I would give it ten or twenty. Why would I buy this book? First off, this is a cheap way of learning about the chart patterns from the expert. Secondly, the book presents very nice section on failing patterns ( busted ). Thirdly, while there is some literature out there on the patterns, I believe Tom Bulkowski was the first in the history of TA who actually conducted so thorough research on pattern performance.
Bulkowski won't give you some B.S. promises about you becoming millioner overnight. The book provides realistic account on the dangers associated with trading patterns. But he also provides you with tools. If you are interested in trading in stocks I really do not see how you can get by without this volume. I would certainly buy it. Ten or so buck you going to spend on it will turn into thousands if you are attentive enough to what Tom says in the book.
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35 of 38 people found the following review helpful:
5.0 out of 5 stars
Excellant novice book, February 11, 2006
This review is from: Getting Started in Chart Patterns (Paperback)
Tom Bulkowski is the Man! As a novice, I found Bulkowski's rules of acquisition and disposition to be clear and concise. Chapter 11 "The Art of Trading - Checklists" is a reference bible that you can use religiously before trading. This book holds a wealth of knowledge for the beginner. I can't pretend to go in depth more than reviewer Mark Dankowski or Daniel J. Grill did. But, I would like to mention the one thing that they did not mention
When I first started reading the book I was looking at dozens of charts online in an effort to see the patterns that Tom refers to. During the first three days in reading his book I was actually using my bookmarker to trace trend lines on my notebook screen. Then I remembered reading that Tom has a web site listed in the Acknowledgements section at the beginning of the book. I never thought to go to the web site until the pain of holding my bookmarker kicked in. Tom's web site offers a bevy of informational bonanzas.
Bonanza number one: Patternz
This is FREE Chart Pattern Recognition Software. Put the bookmarker down and download historical prices free from Yahoo finance and Patternz will display the chart plus all of the chart patterns of your choosing. WOW! This software is worth ten times the price of the book. I paid retail. $19.95.
Bonanza number two: Patterns, patterns, and more patterns to study.
Bonanza number three: Pattern Rankings, based on percentage of success.
Bonanza number four: Trading Help: Rules of acquisition & disposition. Measure rule.
Bonanza number five: Join the Quiz! This is a self help test of your skills. Tom emails you a chart to see if you can identify all of the patterns therein. Are you seeing all of the patterns that Tom sees? This is a measure of how ready you are to start trading for real.
Bonanza number six: Stop placements. Rules on where to place them.
Bonanza number seven: Trading Spreadsheet. Keeping track of your successes and failures.
Bonanza number eight: Definitions of terms.
Bonanza number nine: Studies in trading.
Plus, many more.
Bulkowski's "Encyclopedia of Chart Patterns" is the next must buy.
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