As of 04/23/2019
  Industrials: 26,656 +145.34 +0.5%  
  Transports: 11,003 +26.03 +0.2%  
  Utilities: 773 +1.99 +0.3%  
  Nasdaq: 8,121 +105.55 +1.3%  
  S&P 500: 2,934 +25.71 +0.9%  
YTD
 +14.3%  
 +20.0%  
 +8.4%  
 +22.4%  
 +17.0%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,250 or 7,850 by 05/15/2019
  Up arrow2,975 or 2,800 by 05/01/2019
As of 04/23/2019
  Industrials: 26,656 +145.34 +0.5%  
  Transports: 11,003 +26.03 +0.2%  
  Utilities: 773 +1.99 +0.3%  
  Nasdaq: 8,121 +105.55 +1.3%  
  S&P 500: 2,934 +25.71 +0.9%  
YTD
 +14.3%  
 +20.0%  
 +8.4%  
 +22.4%  
 +17.0%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,250 or 7,850 by 05/15/2019
  Up arrow2,975 or 2,800 by 05/01/2019

Bulkowski's Advance Block

 

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

Overview
Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

Advance Block: Overview

The advance block candle is one that I like, but I am not sure why. It is supposed to act as a bearish reversal, but testing shows it is really a bullish continuation pattern. The reversal is just above the "near random" range of 51% to 59%, where so many candle patterns reside. With a frequency rank of 65 out of 103 candles, it is not a popular rock star, either. The post breakout trend is also mid list. I am losing my enthusiasm for this candle pattern...

Advance Block: Important Results

Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 64% of the time
Frequency rank: 65
Overall performance rank: 54
Best percentage meeting price target: 53% (bull market, up breakout)
Best average move in 10 days: -4.76% (bear market, down breakout)
Best 10-day performance rank: 32 (bull market, down breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal advance block candlestick
Advance Block
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Advance Block: Discussion

As I mentioned in the introduction, the advance block is supposed to act as a bearish reversal, but doesn't. In fact, it acts as a bullish continuation pattern 64% of the time. The overall performance rank is 54, which is mid list out of 103 candles.

The best move 10 days after the breakout is an average drop of 4.76% in a bear market. I consider moves of 6% or higher to be good, so this one falls well short of that. However, the best performance rank is 32, which is respectable. You will find that the best performance comes from advance block candles with downward breakouts.

Advance Block: Identification Guidelines

CharacteristicDiscussion
Number of candle linesThree.
Price trend leading to the patternUpward.
ConfigurationLook for three white candles in an upward price trend. On each candle, price opens within the body of the previous candle. The height of the shadows grow taller on the last two candles.
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Advance Block: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. For advance blocks that signal a reversal, look for them in an upward retracement of a downward price trend -- page 103.
  2. Select tall candles for the best performance -- page 101.
  3. The advance block breaks out upward most often -- page 105.

Advance Block: Example

The advance block candlestick on the daily scale

I consider this chart a wimpy example of an advance block candlestick pattern. In an upward price trend, price forms a tall white candle followed by two smaller bodied white candles (the tall candle is not a requirement, but an observation in this example). Each of the last two candles has taller upper shadows when compared to their body height.

The candle pattern shows the progression from bullish enthusiasm to bearish warning. On the last two candle lines, bulls push price higher only to be beaten back down by the bears. But that does not stop the bulls because a few days later, price stages an upward breakout by closing above the top of the pattern.

Since price trends upward leading to the advance block and breaks out upward, this is an example of a continuation pattern. That is not how theory says the candle works, but you will find it behaving as a continuation almost two-thirds of the time.

-- Thomas Bulkowski

Top of page More

See Also

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.
Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns Bumper's Story Head's Law
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