Written and copyright © 2008-2014 by Thomas N. Bulkowski. All rights reserved.
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 rickshaw man is similar to a high wave candle except that the body is a doji. A doji is a candlestick where the opening and closing prices are within
a few pennies of each other. The rickshaw man has tall upper and lower shadows and a body near the middle of the candlestick line.
Candle theory says that the behavior of a rickshaw man amounts to indecision. I don't know about that (that's a joke). My tests show that it acts as a continuation pattern
51% of the time, which is about random. Thus, reality agrees with theory.
Rickshaw Man Important Results
Theoretical performance: Indecision
Tested performance: Continuation 51% of the time
Frequency rank: 55
Overall performance rank: 35
Best percentage meeting price target: 71% (bull market, up breakout)
Best average move in 10 days: 4.22% (bear market, up breakout)
Best 10-day performance rank: 43 (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.
Rickshaw Man Discussion
The rickshaw man appears on the chart as a tall candle with a doji body. The difference between a long legged doji and a rickshaw man is that a rickshaw
man must have the body near the middle of the candle. A rickshaw man is a long legged doji but a long legged doji is not necessarily a rickshaw man. If you understand that, then
ask your significant other for a treat, and tell them Tom sent you.
The rickshaw man acts as a continuation candlestick 51% of the time. The best average move it can muster is just 4.22% after an upward breakout in a bear market. I consider a good move
as a change of 6% or more, so this falls short. The rise places the performance rank at 43 where 1 is best out of 103 candlestick patterns. That is not bad, but it does leave a lot of
room for improvement. It is also typical that single-line candles work poorly, and the rickshaw man is no exception.
Rickshaw Man Identification Guidelines
|Number of candle lines||One.|
|Price trend leading to the pattern||None required|
|Configuration||Look for the opening and closing prices to be within pennies of each other, unusually tall upper and lower shadows, and the body to be near the middle of the candlestick.|
Three Trading Tidbits for Rickshaw Man
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.
- Rickshaw man candles that appear within a third of the yearly low usually perform best -- page 628.
- Use the price trend leading to the rickshaw man to help predict the breakout direction -- page 629-630.
- Volume gives performance clues -- page 629.
Rickshaw Man Example
Although it my look like I circled two candles in the chart, I am referencing the doji looking candle in the red circle.
That candle line is a rickshaw man. It has unusually tall upper and lower shadows, a body in which the opening and closing prices are about the same, and the body is near the middle
of the candlestick.
This rickshaw man appears in a downward price trend. Notice that the breakout is also downward. A downward breakout occurs when price closes below the low in the rickshaw man.
This candlestick speaks of indecision, as if neither the bulls nor the bears know which way price will breakout. The bulls were in control for a time and pushed price upward, giving
the rickshaw man a tall upper shadow. A long downward shadow appeared when bearish selling pressure forced price lower, but by day's end, price closed about where it opened,
having given up no ground in the process. The rickshaw man candle may look pretty on the chart but it has no investment implications that I have been able to find.
-- Thomas Bulkowski
Copyright © 2008-2014 by Thomas N. Bulkowski. All rights reserved. Visualize whirled peas.