Bump-and-Run Reversal Chart Pattern — How to Spot and Trade It

A calm rise steepens into a speculative 'bump' — then price collapses back through the trendline.

In plain words

A sprint at the end of a marathon — spectacular, brief, and followed by a collapse.

What the classic books say

The Bump-and-Run Reversal is a reversal pattern with reference reliability Medium and illustrative behaviour of ~65-75% follow-through down (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). Common in manias and parabolic runs.

Level by level

Beginner

Price climbs calmly, then rockets, then falls back hard. The rocket phase was the warning.

Intermediate

When the slope of an advance doubles, the move is running on emotion, not accumulation.

Advanced

Draw the original ascent line; the 'run' phase begins when price knifes back through it.

Trade plan (educational template)

• Entry: On the break back below the original (lead-in) trendline.
• Stop-loss: Above the bump's midpoint.
• Target: Back to the lead-in trendline start, or bump height projected down.
• Check the numbers with the Risk-Reward calculator before any entry.

Common beginner mistakes

• Buying the steepest part of the bump

Practise it now

• ▶ Draw the Bump-and-Run Reversal with live trendlines and a ghost forecast
• 📖 Full lesson in the Learning Hub

_Educational content only — not financial advice. Historical behaviour never guarantees future results._