Bulkowski's Trading Checklist ‘cass | slew wave] fundamentais | pavctateey | cule | massarcn | sates | sonware | uodale | Morea Gusom Sewch | Seah come) 25,] 82%] commun i Miart—] Ast oSoRTF Toms argc Geman 00770018 a Industas CDI] 24549 192307% -07%|ARI5 308 or mnADD Hy OSISOIN [PEAon LS [Transports (*DIT):| 10,508 62.67 0.6% ities (*DIU):| 679 5.18 0.8%] Nasdaq ("IXIC):| 7,340 73.01 1.0%. (x7 400 oF 800 by 05/15/2018 SQPSOO("GSPC):| 2,698 25.87 0%, (462,750 oF 2,600 by 05/15/2018 ‘Wiritlen by and copyright © 2005-2018 by Thomas N, Bulkowski, Al rights reserved, Disclaimer: You alone are responsible for your investment decisions. See Privacy Disclaimer for more information. {ds 10,800 or 10,000 by 05/15/2018 (40225 of 68S by 05/152018 Trading Checklist: Summary “This page serves as a checklist to improve your trading esults, Consult it before you buy or sel stock, Fyou want to develop or polish your skis trading chart pattems, then visit the daily quiz. Download one cach day and. practice identifying chart pattems, placing stops and picking price targets. Many traders have remarked that they enjoy to retire at age 36. He is | taking the quizzes and it has helped turn money losing performance into a winning one az internationally known author and sss trader with 30+ years of stock market ‘The following checklists based on information contained in my book, Geitine Stare jn Char Patems, Second Fulton eee aausy | poe ssemdetatadne | CHART tt Bos mr Tatas sss prt se ee eran (General trading “Trading nsveboio See Also 2 Trading Checklist: Before Buying + Chock the markets and trade inthe direction ofthe prevailing market trend. + Check the industry. Are other stocks inthe same industsy moving the seme way? + Are they showing signs of topping out or bottoming? ‘+ Which stock leads the pack? Study it fr clues to future price direction + Chock industry relative strength. Make sure the industry is top ranked, Soe Industry: Relative Ste + Look atthe weekly seae (or the next higher scale) for any threatening chart pales + Is the tock trending inthe same direetion as on the shorter time scale? + Do you see any existing char patteras? + Do you see underlying support or overhead resistance? + Draw trendlines to see where price may intersect them. + Score the chart pattern, See my book, Tadine Classic Chast Patten (pictured on the right) ‘gauge how likely the chart patie will work. [have a taste of the scoring system ers. + Historica review. Find another chart pater inthe same stock and see how it performed in the pest. ‘+ Check your favorite indicators. What are they telling you? ‘+ Relative strength index (RSD): I use this for diversence and as an indiator of overbought (too pricey) or oversold (too cheap. + Bollinger bands: When the bands narrow (low volatility) tat tells me price is going to make a big move Price often housces from one band to the othe, especially when he band is horizontal and price touches in +s the stock price diverging from the indicator? Is te indicator signaling a trade? * Check for iniur swing, litle M or W shaped pattems that may signal a short-term reversala + Reviw th industry relative strength How i this industry doing empared ooters? Youll fnd that indstcs ART ecfoing well wil conte tod wel, ually for mo TERNS Top J sux + Is the stock trending up? Why buy a stock today when it wll be cheaper tomorrow? Wait fr rice to turn up before ‘buying. View the stock onthe weekly scale (or higher time scale) to help decide the trend + Is the stock trading near the yearly igh? Buy stocks showing chat patterns nea the yearly high, preferably breaking out to anew high. When the breakout occurs, price coasts higher on momentum, so you can raise your stop. ‘You do use stops, dott you? Geta quote before trading. Delay buying if the quote is lower than the last time you checked, the stock is up too much intraday, skip the trade. Don't chase a stock higher. Look for overhead resistance, Wher is price likely to sal or reverse? Look for underlying support. How far down isthe stock likely to go? Place that stop with your broker ‘Will a hzowck or pullback happen? Prices return tothe breakout price usually in about @ week. Consider initiating ‘or adding to your position once price resumes the original breakout direction. Statistics show that chart patter with ee ‘throwbacks or pulbacks perform worse than those without theowbacks ox pullback, so Keep that in ming, + Cheek for DCBs. Avoid any stock showing a dead-cat bounce within the lst six months. Why? Because one dead-cat ‘bounce tends to follow another + Prices don't trend forever Ifyou are about to buy a stock that has been trending upward for several days in aro, ‘count on price reversing just after you buy. The same goes fora consecutive declining price series. Wait forthe turn then trad, ‘Trading Checklist: How to sell? + Use a stop. Raise the stop as price rises. Ifyou cant make money inthe markets, chances are you dont use stops x Top, | aux When to sell? Cot.) Trading Checklis + The stock is about to hit your stop. Sel it now! Why wait for price to hit your stop if you know tha it wil? + Avbearish chart pattern has broken out downward, Sell now! If price tums around, i's «pullback and the stock ‘ill soon bead back dawn, ‘+ The stock has closed below an up-sloping trendline. This isthe firs indication ofa tend change. The longer the ‘rendlne the more reliable itis. Switeh to the weekly or higher time) scale and check the endline again, Use the log scale for earlier exit trendline signals, + Stock falls more than 62% retrace. Measure the retrace afer an up move. A retrace larger than 62% means the stock is going down, Period, Sell it + Price as hit the target, If this i a shor-term trade, then sell i If no short-term trade, then raise your stop. ‘The averages are dropping. Ifthe market is taking other stocks dawn along with yours, i time to sel, Flip tothe ‘weekly scale, the trend is still dow, then sell + Stocks in the industry are topping out. Any bearish chart pattems in stocks inthe same industry are warning bell ‘Consider selling. Rae isthe stock that can svn against the current for long + Look atthe weekly scale. New chart pattems, trendlines support and resistance all appear on the weekly chart, Use them as sell signals the market is up but the stock is down. Ifthe Dow is up 100 points but your stock is down, find out why. This intraday price divergence is « warning signal, Sometimes there iv a good reason forthe divergence ~ a huricane approaching ol rigs for example + Historieal price review. What happened the last time th stock made @ new high, shot upwaed ina straight-line run, consolidated, ropped a few points in just days, or stalled a an old high? Past behavior can give you an indication of ‘how well the stock will behave in the future. However, the more you rely on past behavior, the more likely he stock vill surprise you + Chock the indicators, Are your favorit indicators saying sell? What does the best indicator say ~ price? Is price rising or falling? Is pres trending up ot down? Don't know’? Then switch to the weekly seal and ak if rice is rising or faling Wits falling then sel + Indicators are diverging from price Ths is usually a reliable sell signal, but not an automatic one. Price can diverge fiom indicators for months before the stack turns down, if tums down a al Indicator fnluce swings. These M snd W shapes inthe indicator ean call shor-term tuming points accurately + Overhead resistance. Has the stock hit overhead resistance and is now heading dovn? Sell # Isa throwback or pullback happening? Throwbacks and pullbacks happen often after a breakout. Initiate or add to {Your positon after a throwback once price resumes the mave up. Far a pullback, i often your last chance to exit a ‘ck bofore the decline resumes. Take the sell signal and get out, Top | vor ‘Trading Checkli : General Trading Tips+ ‘Tighten stops. If other stocks inthe same industry begin trending down, then tighten your stop. If your stock shoots up several points over several days, then tighten the sop because price may reverse. + Trade tall patterns. Tall pattems outperform short ones, What is short and tall? Refer tomy book, Encyclopedia of (Chase Pasir Second Fulton (pictured on the right) for details as it varies stom pater to pattern. + Narrowing prices. Ifthe daily high-low range narrows overtime, then expect 2 trend change. A symiiluical‘canele, with its narrowing price tend, shows this behavior. The Breakout comes afer the price range contracts and volume diminishes. + Tae busted patterns. Chart pattems that breakout downward then quickly reverse often sou, 4 ‘rade with the trend, If the market and industry are moving up, select stocks with upward ‘breakouts, Avoid countertend tades, + Reversal chart patterns must have something to reverse. stock showing a diamond top/downward breakout th appears several points above a price plateau often returns tothe plateau, + Don't average down (buying more at a lower price). For traders, you will get fed up and sell ust as price bottoms. IF ‘you buy-and-hold, thea ignore this advice; you can likely ride out the downturn unless your siock is Enron, WorldCom, Penn Central, United Airlines + Trade intraday. Switch tothe intraday scale or the next shorter period wo place the trade, The shorter time scale will ‘zoom into the price action and highlight short-term support and resistance zanes that stop as price rises. Check the volatility and place itn closer thn 2 times the current price volatility Never lower a stop. Ifyou feel a deste to lower a stop, sell he stock. Follow the same stocks each day. Become familiar wih them. Don' invest in unfamiliar stocks ‘Choose chart patterns that work for you. Some char pattems perform better than others do, Be selective and ‘become an expert in the patterns you trade, + Keep a trading diary and review it periodically. Log the date, number of shares traded, oder type (stop, market, limit, price filled at, stop loss price, price target, reason forthe trade, and so on Top, J vox + Diverafy. Don't load up your portfolio with stocks from one industry. Look what happened to airline stocks fom 9/11/2001 to 9/17/2001 ("911") Don't over diversity. Owning more than a dozen will make it hard t follow ‘Check commodities. Oi, copper, and natural ges are important ingredients for many industries. Ifthe price of oli shooting up, the airlines and truckers may suffer but ol service companies, refiners, and drillers should prosper + Tune your system. The markets change overtime and so should your system and your trading style. Ifthe markets are tending, remain in your position, Irthe markets are choppy, rely on shot-trm trades Ignore chat room chatter. People in chat rooms are sometimes selling more than tir opinion. Ifyou have to ask, you're making a mistake. I'you have doubts about a trade then don trade. Don't let others spend your money Set price targets Price targets work well for shorerm trades (swing trades). Use trailing stops for longer hold times. Late entry. For proper entry, place an order to buy the stock a penny above the breakout price ‘Watch fora uowhack or pullback, Prices tum an average of 3 days aflera breakout and complete the move back to the breakout price in 10 or 11 days. Pries resume the original breakout direction 86% of the time + Don't short a stock, Ifyou cant make money on the long side, you worst make it on the shor side either. Try it on paper firs. + Prices drop faster than they rise, Price trends after downward breakouts are quicker and steper than ae theie ‘upward counterpars. If you can sel, your losses will grow quickly. + Price reverses I month after the breakout in a bea marke, This is also true ina bull market, but less offen. The l= ‘month benchmark als varies from pattem to pattem. Its rarely shorter, but often longer ~~ 5 to T weeks after the Ineakout + Price moves most in the first week after a breakout, so get in early Codd Top J sux ‘Trading Checklist: Trading Psychology + Are you trading because you want to trade? Consider trading a business nota game ‘+ Are you not trading? This isthe opposite of trading too often. You may be so Scared of taking 2 loss that you avoid trading altogether. Ifyou get stopped out of several stocks, walk away. Paper trade until the profits retum. Follow the system. Would you be making more money if you followed your trading signals? Understand why you ignoring the signals you receive. Don't overtrade. Sometimes the Best place for eash is inthe Bank. You don't HAVE to trade Learn from mistakes. Review your trades peviodcelly. I'l uncover bad habits. Focus on the positive. The loss you suffered today pales tothe killing you made ast week. Ignore profits. I'you find youself getting nervous about a winning trade or making too much money, then ‘concentrate not on the bottom lie but on improving your trading skills. Gel used to making too much moxey. + Obey your trading signals. Otherwise, what ere you trading for? Plan your trade and trade your plan, Don't trade when you're upset. This aso goes fr being too excite. Abandoning a winning system. Don' became bored with your winning system and search for new, more exciting ‘ways fo lose money. ~ Thomas Bulkowskirovide addtional insipht into the mind [uid aa. How long to you need to hold ont a stock? Find out Best buy days. Which day ofthe week isthe best ane to buy oF sell? ‘BesLhuy months. Can buying a the end ofthe worst performing month and selling atthe best performing be profitable? Holidays, Does the market rise or fll before and aftr holidays? Answer: Fal ‘Markt can, Chart pater in small cap stocks outperform, ‘Seasonally, What ae the best months to buy and sell stocks? How to pick stocks, part 1 ‘How tp puck sucks, pat 2 ‘Premature buying. Learn how to prevent buying too soon ‘Sluchs thal double, Discover what atibutes they share ‘Weiten by andcoyrph © 200.2018 by Thora N. Bukowski All sight etaved Diemer Yau lane responsible fr ous vent des. Se sain frre infomation, ow Kats, Kang Fan seal th dagen wore,