Bump and Run Patterns Guide : Video with examples

The Bump and Run chart model is an important reversal pattern that helps traders identify the ending of a trend and the beginning of another. It is an ultra-modern chart pattern that allows traders to figure out the end of a trend and the beginning of another. Bump-and-run strategy trading is considered a very aggressive market system. One of its aims is to track down very fast-moving markets. We are working hard to develop the most comprehensive guide on different chart pattern strategies. In order to understand the psychology of this chart pattern read this chart pattern guide, i will explain it as simply as possible.

Bump and run Patterns FAQ

Youtube Video Guide

What is bump and run Patterns ?

Bump and Run is a two-step market pattern to determine price reversal. Bump and run pattern is an out-of-the-common chart pattern, and traders use it in shares, indices, and forex trading. The Bump and run pattern was invented by Thomas Bulkowski. He studied the structure of the market  and made a chart pattern based on the price action. Retail traders nowadays widely use it to predict the long-term trend analysis of the market.

The chart below shows an example of bump and run pattern in the forex market.

bump and run reversal (BARR) pattern in trading

This BARR chart pattern is further divided into two types. We can recognize either a bullish bump and run pattern or a bearish B&R pattern. This distinction is based on the direction of a trend reversal.

Bullish Bump And Run Pattern example

Bullish bump and run formation is a bullish reversal pattern in the forex market. The Bump will exhibit a bearish price trend. After the recognition of a trend line breakout, a bullish reversal will form. As a result, the Run phase will be in the bullish direction.
Exactly as it is shown on the screenshot below.

bullish bump and run pattern

Bearish Bump and Run Pattern Example

Bearish B&R structure is a bearish trend reversal pattern in the FX exchange. Here, the Bump will exhibit a prior bullish trend. When the trendline breakout appears, a bearish trend reversal will form. So, the Run phase will be in the bearish direction.
To understand it more, have a look at the chart below.

bearish bump and run patterns

How to identify them ?

As we mentioned before, the bump and run reversal pattern has two phases. The bump phase and the un phase. So, to identify the overall pattern we should know first how to recognize these two phases.

Bump phase of the chart structure

At the first, there will be a primary trend either a bullish or bearish trend. After that, a bump phase will appear. It is simply an impulsive wave at the end of the trend. Before the Bump, there was always a trend either bullish or bearish. After the trend, an unanticipated bump in the price pattern will appear. The first step to making it easier for a forex trader is to draw a trend line. This trend is based on the previous trend (higher highs and higher lows). To see a valid pattern on the chart, there must be almost two or three waves before the bump.

After drawing a trendline on a previous slow trend, you should be on the lookout for an upcoming price rally Pattern. During a bump, the price moves in a steeper trend and away from the trend line. Like a fake price move. You can also draw a small trendline on the elevation to confirm a trendline breakout.

The bump wave should be larger than the previous two or three waves.

Run phase of the chart structure

After the bumps are formed, the run is the second stage of the pattern. The price will break above the minor uptrend line and then start the run phase. The market is undergoing a major trend reversal and the price will move in the opposite direction in a push wave. Then it will also break the main trend line and another push wave will also form.

How do you trade with them?

When trading bump and run pattern strategy, you must first identify the uptrend and then determine the acceleration (jump) of the uptrend. These two components of the trend form the first part of the pattern.
The first step is to identify trending stocks. Then the elevation on the chart should definitely be steeper. Also, traders can consider trading volume. Volume is critical to the effectiveness of bumps and runs patterns. In previous trends, it was usually low. Then, once the bump appears on the chart, it climbs higher. This helps lift the stock up and creates an actual bump on the chart.
Forex traders should also confirm the validity of bumps and run patterns. It does this by checking that the vertical distance between the top of the hump and the leading trend is at least twice the vertical distance between the top of the price action before the hump and the leading trend line.
Real confirmation of a bump and run reversal pattern is accompanied by a breakout of the leading trendline. Once the hump is formed, expect the price to start moving in the direction of the trendline.

BARR structure

The chart above shows a trading strategy example with a bump and run pattern. Although stock price action may hesitate for a while when a trend is reached, a trend breakout occurs when the pattern is valid. If you see a breakout, the pattern is valid and you can continue chasing its potential. You should only start trading after confirming the validity of the pattern and spotting a breakout of the leading trend. Traders, during a bearish breakout, should short a position if the pattern is bearish. But, If it’s a bullish, traders should go on a long position.

Conclusion

The bump and run chart pattern is another high-probability trade system that many professional traders like. You have to be very comfortable with trading reversal patterns, especially bump and run reversals, as the market moves very quickly during the development of this major chart pattern.

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