The old adage is "a failed sell signal is a buy signal, and a failed sell signal is a buy signal". Similar to the concept of trapped buyers and trapped sellers. Where did everyone pile in long? Ok, now if the price falls, they're trapped, so go short. Where did everyone pile in short? Ok, now if the price rises, go long.
Bulkowski refers to 'busted' patterns. And in his statistics, he shows clearly that these busted patterns are better performers than normal pattern breakouts.
Basically, it's about going against the crowd, which is suitable for shorter term mean reversion and swing trading. Momentum trading is about going with the crowd and holding on. It's not a good idea to go with the crowd and take small profits unless your timing is exquisite. Even then it will probably not work long term. You should either hold on as long as possible, or avoid. Or become a swing trader.
