Glossary › busted pattern

Trading glossary · patterns

busted pattern

A chart shape that breaks one way, then quickly snaps back and runs the other way, trapping people who trusted it.

The fuller meaning

A pattern whose breakout fails and reverses hard through the other side, such as a double top whose breakdown reverses back above the peaks. Trapped traders exiting together can speed the move, so a busted pattern can become a signal of its own; a stop at the failure point limits the damage.

busted pattern.

Related words

apex · ascending triangle · bear flag · bull flag · chart pattern · continuation · continuation pattern · converging lines · cup and handle · descending triangle