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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 Matching Low

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Market
Industrials (^DJI):
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Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/23/2017
20,657 -4.72 0.0%
8,936 -51.04 -0.6%
703 -1.87 -0.3%
5,818 -3.95 -0.1%
2,346 -2.49 -0.1%
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21,250 or 20,600 by 04/15/2017
9,500 or 8,700 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,425 or 2,325 by 04/15/2017
Mutt Losers: None YTD
Mutt Winners: None YTD

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.

As I create these candlestick pages, I am reminded that candles usually obey the prevailing price trend. In this case, the matching low candlestick is supposed to be a bullish reversal on the idea that the stock closed at the same price twice. It is a support zone. Testing reveals that the pattern pushes through this support and acts as a bearish continuation 61% of the time.

The surprising news about this candlestick pattern is how well price trends after the breakout, ranking 8th out of 103 candlestick types where 1 is best. Let's take a closer look at the matching low.

Matching Low Important Results

Theoretical performance: Bullish reversal
Tested performance: Bearish continuation 61% of the time
Frequency rank: 58
Overall performance rank: 8
Best percentage meeting price target: 69% (bull market, up breakout)
Best average move in 10 days: 7.15% (bear market, up breakout)
Best 10-day performance rank: 13 (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 matching low candlestick
Matching Low
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Matching Low Discussion

The matching low candlestick has potential, as the introduction described. The candle is supposed to be a bullish reversal, but instead acts as a bearish continuation 61% of the time. It has a frequency rank of 58, which is about mid list. You will be able to find this candle pattern in a historical price series, but it won't be easy. The overall performance has a rank of 8 where 1 is best. That is excellent. The best average move is 7.15%, ranking 13th, where I consider 6% as being a good move.

The matching low candlestick does best after an upward breakout. Since price trends downward into the candle, that would mean the best performance comes when the candle acts as a reversal and not a continuation.

Matching Low Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternDownward.
ConfigurationLook for a black candle with a tall body. Following that, find a black body with a close (not the low) that matches the prior close.
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Three Trading Tidbits for Matching Low

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. Matching low candles that appear within a third of the yearly low perform best -- page 564.
  2. Matching lows within a third of the yearly low act as continuations most often -- page 567.
  3. Trade the matching low as part of a downward retracement in an upward price trend -- page 565-566.

Matching Low Example

The matching low candlestick on the daily scale

The chart shows a matching low candlestick pattern, circled in red on the daily chart. The price trend leads downward to the matching low candles which are both black. The first candle has a tall body, but the second need not. The closing price is what matches in the matching low, not the low price. Go figure.

The matching low in this example acts as a reversal candle. Why? Price trends downward into the candle pattern and breaks out upward. Thus, the direction changes from down to up. In fact the candle lows act as a support zone, highlighted here by the horizontal red line.

Notice how the breakout from the matching low candlestick creates an upward price trend that joins with the existing up trend? That is the trading setup that works best. Trade with the tend. The candle appears as a downward retracement in an upward price trend. Look for that setup and be rewarded.

-- Thomas Bulkowski

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See Also

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. Husband for sale. Comes with flat screen TV an remove control.