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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Falling Window

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As of 05/26/2017
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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

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

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The falling window is a fancy name for a price gap in a downward price trend. It occurs when yesterday's low is above today's high, leaving a hole on the daily price chart. The pattern appears in a falling price trend, and it acts as a bearish continuation pattern. Falling windows occur often, so you will find them on the charts, but the longer the time scale, the more difficult it is to find one. Once the trend is underway, it tends to remain moving as the overall performance rank suggests.

Falling Window Important Results

Theoretical performance: Bearish continuation
Tested performance: Bearish continuation 67% of the time
Stopped in gap: 25%
Frequency rank: 23
Overall performance rank: 7
Average time to gap closed: 55 days
Median time to gap closed: 9 days

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

The ideal falling window candlestick
Falling Window
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Falling Window Discussion

As I mentioned in the introduction, the falling window is a space left on the price chart. On the daily chart, a dividend can cause a gap as well as a surprising earnings announcement or many other types of events. The falling window acts as a bearish continuation pattern 67% of the time, which is respectable. The overall performance rank is 7, but that really measures the price trend surrounding the falling window and not the window itself.

One of the more interesting statistics from Important Results is the stopped in gap number. For a falling window, this is the percentage of time that a minor high appeared within the gap before price closed the gap. In other words, a gap showed overhead resistance 25% of the time.

The average time to close the gap is 55 days, but the median is 9 days. Closing the gap means price retraces far enough to cover the gap. If price gaps from $1.50 to $1, then price would have to rise back to $1.50 to close the gap. The large difference between the two numbers, 55 and 9, is because the average has some gaps which take a long time to close, pulling the average upward. The median just splits the list in two and reports on the middle number.

Falling Window Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternDownward.
ConfigurationFind a pattern in which yesterday's low is above today's high.
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Falling Window Example

Rising and falling windows on the daily scale

The chart of 3M shows many different windows, some falling and some rising. A falling window will appear in a downward price trend, such as that shown at point A. The day after the white candle, price gaps open lower and struggles to close the gap throughout the day, but cannot do it. A hole remains on the chart.

The other points, B, C, and D, are all gaps called rising windows. Those have a high price on one day that remains below the low of the next day, leaving a hole on the chart.

One of the secrets to rising and falling windows is to determine the gap type. Rising window B, for example, is a breakaway gap because it breaks away from the small congestion area. C is an exhaustion gap because the price trend ends soon after. Point D is an area or common gap because price closes that gap shortly after it appears.

What type of gap is falling window A? Since price is trending lower, it is probably an exhaustion gap and not an area gap.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. That metronome keeping beat with the music is your car's turn signal.