|
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 Charts  , 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.
The bullish meeting lines act in theory as they do in reality -- bullish reversal of the downward price trend. However, the reversal performance is near random, meaning you will not
be able to predict the breakout direction ahead of time with any assurance.
Once the upward breakout occurs, price trends, scoring very well for price performance over the coming 10 days, regardless of the bull or bear market conditions. Unfortunately, the
frequency rank is 72 out of 103 candlestick types. That makes it somewhat rare, like seeing a hummingbird in Canada during the late fall.
Bullish Meeting Lines Important Results
|
Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 56% of the time
Frequency rank: 72
Overall performance rank: 18
Best percentage meeting price target: 66% (bull market, up breakout)
Best average move in 10 days: 5.08% (bear market, up breakout)
Best 10-day performance rank: 27 (bull 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.
|
 Bullish Meeting Lines
|
Bullish Meeting Lines Discussion
The bullish meeting lines candlestick pattern acts as a bullish reversal 56% of the time, which is what I consider "near random." However, once the breakout direction is established,
price tends to trend. The best performance 10 days after an upward breakout in a bear market is 5.08%. I consider 6% as being a good move, so this one is a bit short. The best performance
rank is 27. That is decent but not spectacular since 1 is the best performance out of 103 candle types.
Considering that just 66% of the time does an upward breakout in a bull market meet the price target, the trend after the breakout may not extend as high as the height of the candle
pattern projected upward from the top of the candle. Thus, be modest in your targeting and expectations.
Bullish Meeting Lines Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for a tall black candle followed by a tall white candle in an upward price trend. The two closes should be near one another. |
Three Trading Tidbits for Bullish Meeting Lines
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.
- Bullish meeting lines candles that appear within a third of the yearly low perform best -- page 582.
- Reversals occur most often within a third of the yearly high in a bull market -- page 585.
- Trade in the direction of the breakout when it agrees with the primary trend -- page 583-584.
Bullish Meeting Lines Example
The chart shows a bullish meeting lines candle pattern, circled in red on the daily scale. The first day is a tall black candle in a
downward price trend. Following that is a tall white candle with closing prices between the two candles at or near the same price.
The breakout from this bullish meeting lines candle is downward, joining the downward primary trend. This candlestick pattern acts as a continuation of the price trend. Notice
that when the candle pattern breakout and the primary tend both agree, price tends to drop further. Trade with the trend for the highest success rate.
-- Thomas Bulkowski
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.
"I have never been lost, but I will admit to being confused for several weeks." -- Daniel Boone
|
If you buy ANYTHING, they pay for the referral.
on 
