Chart Patterns
Trade Chart Patterns Like The Pros
Every one of the 65 patterns gets the same three lines: entry, stop, target, on a real chart with real prices and a real date. That discipline is the whole value here. The reliability claims wrapped around it are adjectives with no data behind them, written by an author who opens the book by attacking other people's statistics.
The one idea
A chart pattern is worth nothing until you can write it as three numbers. Most pattern books stop at the picture: this is a flag, flags are bullish, good luck. Duddella's premise is that recognition is the easy half and the order ticket is the hard half, so he forces all 65 patterns into one fixed template. Every section says where you get in, where you admit you were wrong, and where you take money off. Then it shows a dated chart of a real instrument with the actual price levels marked. That structure is the book, and it is the reason to own it.
Underneath the 65 patterns sits one entry mechanic that repeats in nearly every chapter. Do not buy the breakout itself. Wait for a confirmation bar, ideally a wide-range one, then enter one or two ticks past that bar's high for a long or its low for a short. The setup is only live for the next three to five bars, after which he says it has failed to materialize and should be dropped. That single rule converts a line you drew by hand into an objective order with a defined trigger and an expiry, which is more than most pattern books ever give you.
The third piece is what he refuses to include. No oscillators, no momentum indicators, no statistics. He argues that no trader at the screen recalls whether the throwback rate is 32 percent or 33 percent, so publishing those numbers is theater. He is half right about how people actually trade. He is entirely wrong about what should replace them, and that swap is where the book gets into trouble.
What it actually teaches
The book runs the same five-step loop on every pattern, from a bull flag to a Crab.
IDENTIFY THE STRUCTURE, WITH RATIOS WHERE THEY APPLY
Geometric patterns need the trendlines touched at least twice a side before the pattern counts. Harmonic patterns need the Fibonacci ratios to land. His primary retracement set is 0.382, 0.5, 0.618 and 0.786, with 1.272 and 1.618 for extensions. The secondary set is 0.236, 0.886, 2.272 and 2.618. The four five-point patterns are separated almost entirely by where B lands: Gartley wants B between 0.382 and 0.618 of XA, Bat wants B under 0.618 (usually near 0.50), Butterfly wants 0.786, Crab wants 0.618.
WAIT FOR A CONFIRMATION BAR
Never trade the pattern's completion by itself. Price has to close outside the trendline, or reverse out of the Potential Reversal Zone, and then print a confirming bar: a wide-range bar, a higher high for longs, a lower low for shorts. The wider that bar, the better the signal. This is the step most readers will skip and it is the one doing the actual work.
ENTER ONE TO TWO TICKS BEYOND THAT BAR
Long goes one or two ticks above the confirmation bar's high, short one or two ticks below its low. The order stays live for three to five bars only. Past that, the setup is dead and you stand down. For the NR7 inside-day setup borrowed from Crabel, the trigger is mechanical instead: compute ORB as the 10-bar average distance from open to high (or open to low), then buy at the day's high plus ORB or sell at the low minus ORB.
PUT THE STOP ON THE STRUCTURE, NOT ON A DOLLAR AMOUNT
The stop goes where the pattern would be proven wrong: past a major swing high or low, past the trendline, or at a Fibonacci confluence level. Rectangles are the exception with a tighter rule, stop at the midline of the channel, because a return to the middle kills the pattern. Harmonic trades stop just past D or the PRZ. When the pattern is so wide that the risk-to-reward is unattractive, he uses half the pattern range instead of the full one.
TAKE TARGETS OFF THE MEASURED DEPTH
Nearly every target is the pattern's own height projected from the entry. Triangles run 100 percent of the triangle's depth with a partial exit at 50 percent. Rectangles run 70 to 100 percent of the depth. Flags run 70 to 100 percent of the prior pole from the breakout, with a second target at 138 to 162 percent. Head and Shoulders runs the head-to-neckline distance. Gartley targets the C and A levels first, then 1.27 to 1.62 of AD. Dead Cat Bounce is the odd one: after a 15 percent or larger event gap, fade the bounce at 50 to 62 percent of the gap and target 100 percent of the gap range. Pivots come from the floor formula, PP = (H+L+C)/3, R1 = 2PP - L, S1 = 2PP - H, R2 = PP + (R1-S1), R3 = R1 + (H-L).
What it looks like Monday morning
You stop drawing patterns and start writing tickets. Pick one pattern you already trade, and before the next entry write down three numbers on paper: the trigger price one tick past the confirmation bar, the stop price sitting on a swing or a trendline rather than on a round dollar figure, and the measured target taken from the pattern's own height. If you cannot fill in all three, you do not have a trade yet, you have a drawing. That single habit is what the book is selling and it survives even if you reject every reliability claim in it.
The second change is the expiry. Give the setup three to five bars to trigger and then cancel it. Most pattern traders leave stale orders hanging for days and get filled long after the structure decayed, which is how a good pattern turns into a bad entry. Set the clock, and when it runs out, walk. If you also trade floor pivots, plug the formula into your platform once and use the levels as your target menu rather than your entry signal, which is exactly how the book uses them.
| Pattern | B retracement of XA | D level (PRZ) | BC extension | Stop per the text |
|---|---|---|---|---|
| Gartley | 0.382 to 0.618 | 0.618 to 0.786 of XA | 1.27 to 1.62 | Below D or the PRZ |
| Bat | Under 0.618, usually near 0.50 | 0.886 of XA | 1.62, with 1.27 AB=CD | Rule says below X, examples use below D |
| Butterfly | 0.786 | 1.27 of XA, AB=CD | 0.382 to 0.886 of AB | Below the pattern low |
| Crab | 0.618 | 1.618 of XA | 2.62 to 3.62 | Below the PRZ |
The four differ almost entirely by where B lands, so that is the number to check first, and the Bat row is where the book contradicts itself.
You only need one single pattern to be successful.Suri Duddella, Trade Chart Patterns Like The Pros
Where it fails
- The reliability ratings are adjectives pretending to be evidence. The introduction attacks published pattern statistics as 'unproven and semi-useless' and refuses to include any. What replaces them is worse. Diamonds, Cup and Handle, Head and Shoulders, Adam-Eve, Broadening Tops, Three Hills and the Inverse Dragon are all called 'very reliable.' Wedges, Round Tops and Island Reversals get 'high failure rate.' No sample, no test window, no market, no date range. The one hard number in the entire book, ascending triangles reaching target 'about 75% of the time' in chapter 6 of this 2007 edition, carries no source at all. The statistics he mocked at least published a methodology you could argue with. You cannot argue with 'very reliable.'
- Not one worked example in the book is a loser. Roughly 130 annotated charts across 65 patterns, and every single trade reaches its target. A full-text search finds no stopped-out trade, no missed target, no scratch. Even the two sections titled 'Head and Shoulders Failure' are not losses: the pattern fails, and the failure is immediately reframed as a profitable long with its own entry, stop and target. The CFTC hypothetical-results disclaimer on the copyright page is doing enormous work here. A method demonstrated only on hindsight-selected winners tells you nothing about expectancy, and expectancy is the only thing that decides whether you make money.
- The stated rules and the worked examples openly contradict each other. All from the 2007 edition. The Bat chapter says the pattern fails below X and to place the stop one tick below X, then its Boeing example puts the stop below D at $84.60, a far tighter and completely different risk. That same chapter says to enter one tick above the confirmation bar out of the PRZ at D, then its example enters 'above B level at $88.' The Butterfly rule puts D at 1.27 of XA, its Amazon example forms D at 1.27 of AB. Head and Shoulders states a 100 percent head-to-neckline target, its Russell example takes 62 to 100 percent. The Bear Flag rule says 76 to 100 percent of AB, its own example says 70 to 100 percent. Trade the rule and you get one trade, copy the picture and you get another.
- Almost none of the patterns are his, and the credit is uneven. Carney is named for the Bat and Crab, Pesavento and Gilmore for the Butterfly, plus Gartley, Sperandeo, Crabel, Jackson, Donchian, Bollinger, Keltner and Andrews. That is proper and welcome. But Adam-Eve, Pipe tops and bottoms, and Scallops are Thomas Bulkowski's coinages from the Encyclopedia of Chart Patterns and appear here with no attribution whatsoever, and Bulkowski is absent from the 35-title bibliography. The Dead Cat Bounce chapter uses his 15 percent event-decline threshold with no source. The bibliography itself has no page references and no in-text citations, so no claim in the book can be traced back to where it came from. Only a handful of patterns are original, and the author explicitly claims just one, the Sea Horse, as his own 2005 discovery.
- It quietly assumes you sit in front of a professional platform all day. The majority of examples are 5-minute, 30-minute and 610-tick charts on E-mini futures, all drawn in TradeStation. The core entry rule expires in three to five bars, which on a 610-tick Russell chart can be under two minutes. If you look at charts after work, half this book is unusable as written. It also never once discusses position sizing, account size, commissions or slippage, and several examples carry stops one to three ticks from entry where a single tick of slippage rewrites the risk-to-reward you were sold.
- The market these charts came from no longer exists in that form. Nearly every intraday example is the Russell 2000 E-mini under the symbol ER2, a contract that left CME for ICE in 2008 and now trades as RTY with different specs, hours and tick value. The book predates the algorithmic order flow of the 2010s, current index-futures liquidity structure, and the well-documented decay of simple breakout signals once they became trivially automatable. There is no discussion of overnight and Globex session structure beyond one short chapter, and no acknowledgment that a pattern loses its edge precisely when every retail platform starts drawing it for you. The geometry still describes what price does. The claim that it pays no longer rests on anything you can verify.
Who it is for
Buy it if
You already spot patterns fine but freeze at the order ticket, and you want one page per pattern that says trigger, stop and measured target in plain terms. You trade stocks or index futures on intraday or daily bars and can act during market hours. Treat it as a desk reference you flip open, not a book you read through once.
Skip it if
You want proof that any of this makes money. There is none in here and the author tells you up front he will not supply it. Skip it if you already own Bulkowski, because you have the same patterns with real sample sizes and honest failure rates attached. Skip it too if you only see charts after the close, since the three-to-five-bar timing rules assume you are watching live.
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