Glossary and Back-Matter Reference

Core idea

The back-matter of the Encyclopedia is the definitional reference that every topic depends on. When Bulkowski writes "average rise to the ultimate high" or "throwback rate" or "5% failure," those terms have specific, measurable definitions — not loose intuitions. This topic collects those definitions so the topic statistics are interpretable without re-reading the methodology section of every topic.

The most load-bearing terms are: breakout (the close outside the pattern boundary), ultimate high / ultimate low (the extreme price reached before a 20% reversal or close back through the breakout), throwback / pullback (return to the breakout after an up / down breakout respectively), measure rule (the pattern-height-based price target), 5% failure (a breakout that fails to move 5% beyond the breakout before reversing), and performance rank / failure rate rank (the comparative position among all patterns).

Bulkowski's framing: The book's statistics are only useful if the terms are consistent. A "throwback rate of 67%" means something specific — that 67% of upward breakouts returned to the breakout price within roughly a month and then resumed the trend. Without the glossary, that number is meaningless.

Why it matters

Pattern-trading literature is notoriously loose with terminology. One author's "breakout" is another's "confirmation"; one's "pullback" is another's "throwback." Bulkowski's contribution is not just the statistics but the measurement protocol — defining every term so that the 75 topics' numbers are comparable to each other and (in principle) reproducible by anyone with the same data.

Why "ultimate high" is the most important definition

Bulkowski measures average gains from the breakout to the ultimate high — the highest price reached before either (a) a close back below the breakout, or (b) a 20% decline from the local peak. This is not the same as "the highest price ever reached after the breakout." It is the maximum capturable gain assuming a reasonable exit discipline. Without this bound, average-rise numbers would be inflated by tail outcomes traders rarely capture.

Why "throwback" and "pullback" are split

A throwback is the return to the breakout after an upward breakout. A pullback is the return to the breakout after a downward breakout. They are mirror events but Bulkowski tracks them separately because their statistics differ — throwbacks tend to be more common (62-67% across patterns) and pullbacks slightly less so. The terminological split keeps the directional cases from being conflated.

Why "5% failure" is the failure benchmark

A 5% failure is a breakout that moves less than 5% in the breakout direction before reversing. The 5% threshold is somewhat arbitrary but small enough to cover normal noise and large enough to be meaningful for trade sizing. The failure-rate columns throughout the book are all anchored to this 5% benchmark — a pattern with a "13% failure rate" means 13% of confirmed breakouts moved less than 5% before reversing.

Key takeaways

Mental model

Copy sourceZoom

Practical application

The glossary is a lookup resource, not a reading resource. Two practical uses:

As a verification step

When reading any topic's statistics, every term carries the specific definition from this glossary. If you are not sure what "throwback rate of 64%" means in Measured Move Down, the glossary confirms: 64% of upward breakouts return to the breakout price within roughly a month before resuming. Without the glossary, the number is approximately the right magnitude but the implication is unclear.

As a benchmark for your own trade tracking

If you log your own trades against Bulkowski's statistics, use his definitions exactly. "Average rise" in your spreadsheet should mean the same thing as "average rise" in his tables — measured to the ultimate high (the peak before a 20% reversal or close back through entry), not to the eventual all-time high of the stock. Apples to apples requires the same measurement protocol.

Example

A trader reads Double Bottoms, Eve & Eve (Double Bottoms, Adam & Adam) and notes: average rise 35%, throwback rate 64%, 5% failure rate 8%. Without the glossary, those numbers are abstract. With the glossary:

• Average rise 35%: 35% from the close above the highest peak between the two bottoms (the breakout) to the ultimate high (the highest price before a 20% reversal or close back below the breakout)
• Throwback rate 64%: 64 out of 100 confirmed breakouts return to the breakout price within roughly a month before resuming the up-move
• 5% failure rate 8%: 8 out of 100 confirmed breakouts move less than 5% above the breakout before reversing

Now the trader can plan: average expected move ~35%, but with a ~64% chance of a small early drawdown back to entry (build position discipline around the throwback rather than panicking out), and a ~8% chance the entire pattern misfires (size the trade for that loss probability).

That conversion — from raw numbers to actionable trade plan — is what the glossary unlocks. The same numbers in another book without rigorous definitions would tell the trader almost nothing.

Related lessons