As of 11/27/2020
  Indus: 29,910 +37.90 +0.1%  
  Trans: 12,561 -59.99 -0.5%  
  Utils: 873 -7.80 -0.9%  
  Nasdaq: 12,206 +111.45 +0.9%  
  S&P 500: 3,638 +8.70 +0.2%  
YTD
 +4.8%  
 +15.2%  
-0.7%  
 +36.0%  
 +12.6%  
  Targets    Overview: 11/12/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Up arrow950 or 850 by 12/01/2020
  Up arrow12,500 or 11,200 by 12/01/2020
  Up arrow3,750 or 3,400 by 12/01/2020
CPI (updated daily): Arrows on 11/2/20
As of 11/27/2020
  Indus: 29,910 +37.90 +0.1%  
  Trans: 12,561 -59.99 -0.5%  
  Utils: 873 -7.80 -0.9%  
  Nasdaq: 12,206 +111.45 +0.9%  
  S&P 500: 3,638 +8.70 +0.2%  
YTD
 +4.8%  
 +15.2%  
-0.7%  
 +36.0%  
 +12.6%  
  Targets    Overview: 11/12/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Up arrow950 or 850 by 12/01/2020
  Up arrow12,500 or 11,200 by 12/01/2020
  Up arrow3,750 or 3,400 by 12/01/2020
CPI (updated daily): Arrows on 11/2/20

Bulkowski on the High Wave Candle Pattern

 

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

$ $ $

The high wave candlestick reminds me of the long legged doji candlestick only the high wave is not a doji. Both have tall upper and lower shadows. The high wave candle can be any color, but the long legged doji has no body so it has no color.

The high wave acts as a reversal just 51% of the time (think random) and a mid list performance rank of 67, where 1 is best out of 103 candlestick types.

Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

High Wave Candlestick: Important Results

Theoretical performance: Indecision
Tested performance: Reversal 51% of the time
Frequency rank: 17
Overall performance rank: 67
Best percentage meeting price target: 77% (bull market, up breakout)
Best average move in 10 days: -3.38% (bear market, down breakout)
Best 10-day performance rank: 60 (bear market, up 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 high wave candlestick
High Wave

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High Wave Candlestick: Discussion

Testing the high wave candle shows that it acts as a reversal 51% of the time, which is about random, and that agrees with theory (indecision). The high wave candle appears often, giving it a frequency rank of 17 (a rank of 1 means most often, 103 means almost invisible).

Overall performance is well behind the leaders, ranking 67. The best move came after downward breakouts in a bear market. Price dropped an average of 3.38% whereas a good move would be over 6% in 10 days. The best performance over 10 days ranks 60 and that happened in a bear market after an upward breakout.

High Wave Candlestick: Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternNone required
ConfigurationLook for tall upper and lower shadows attached to a small body. The body is not a doji (meaning that the opening and closing prices must be more than a few pennies apart.

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High Wave Candlestick: 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. High wave candles that appear within a third of the yearly low perform best -- page 412.
  2. High wave candles confirmed by an opening gap tend to perform best -- page 414.
  3. Breakouts below the 50-trading day moving average tend to outperform -- page 414.

High Wave Candlestick: Example

The high wave candlestick on the daily scale

The high wave candlestick shown on the daily chart at point A appears in an uptrend. For that reason, I would expect the breakout to be upward and that is what happens (a breakout is when price closes either above the top or below the bottom of the candlestick).

The high wave candle has tall upper and lower shadows with a non-doji body. That means the opening and closing prices are far enough apart to show a body color.

-- 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.

My novels:  Bumper's Story Head's Law

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

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