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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 Long White Day

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 11/22/2017
23,526 -64.65 -0.3%
9,627 11.94 0.1%
758 -0.24 0.0%
6,867 4.88 0.1%
2,597 -1.95 -0.1%
YTD
19.0%
6.4%
14.9%
27.6%
16.0%
Tom's Targets    Overview: 11/14/2017
23,700 or 22,800 by 12/01/2017
9,300 or 9,800 by 12/01/2017
800 or 750 by 12/01/2017
7,000 or 6,500 by 12/01/2017
2,625 or 2,540 by 12/01/2017

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.

In my book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the right, I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines in the tests.

The book takes an in-depth look at 103 candlestick patterns and reports on behavior and rank (3 types: reversal rate, frequency, and overall performance), identification guidelines, performance statistics (tables of general statistics, height, and volume), trading tactics (tables of statistics on reversal rates and performance indicators), and wraps each chapter with a sample trade. I share a sliver of that information below. If you like what you read here, then you will love the book. Help support this website and buy a copy by clicking on the above link.

I expected the long white day candlestick to behave randomly, but it suggests a continuation of the existing price trend 58% of the time. It appears frequently in a historical price series, so you will be able to find it often. Performance is mid list, though, ranking 53 where 1 is best out of 103 candle patterns.

Long White Day Important Results

Theoretical performance: Continuation
Tested performance: Continuation 58% of the time
Frequency rank: 10
Overall performance rank: 53
Best percentage meeting price target: 60% (bear market, down breakout)
Best average move in 10 days: -6.21% (bear market, down breakout)
Best 10-day performance rank: 16 (bear 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 long white day candlestick
Long White Day
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Long White Day Discussion

As I mentioned in the introduction, the long white day candlestick acts as a continuation 58% of the time but it appears frequently, ranking 10th. Overall performance is well down the list from 1. It ranks 53.

Since the candle is a tall one, it only reaches the measure rule price target 60% of the time. That is when you take the height of the candle pattern and add it to the price of the top of the candle or subtract it from the bottom to get a target, depending on the breakout direction.

The best average move occurs after a downward breakout in a bear market. Price drops 6.21% ten days after the breakout. That is a nice move. That also places the 10 day performance rank at 16, which is also quite good.

Long White Day Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternNone required.
ConfigurationLook for a tall white candle with shadows shorter than the body and a body at least three times taller than the average body height over the last 2 or 3 weeks.
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Three Trading Tidbits for Long White Day

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. Long white day candles that appear within a third of the yearly low perform best -- page 499.
  2. Long white days taller than the median show price that moves almost twice as far after the breakout as those shorter than the median -- page 499.
  3. Breakouts below the 50-trading day moving average tend to outperform -- page 501.

The long white day candlestick on the daily scale

Long White Day Example

Candles A and B in the daily chart both appear in an upward price trend. In A, price reverses direction the next day, but in B, price continues higher after a 1-day pause.

The first candle (A) is a reversal because the inbound trend is upward and the breakout is downward. The B candle has upward inbound and outbound trends, so it is a continuation candle.

Notice that the shadows are shorter than the body and that the body is taller than most recent candles.

-- 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. Your kid may be an Honor Student, but you're still an idiot.