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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 Takuri Line

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As of 04/21/2017
20,548 -30.95 -0.2%
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Takuri Line Candlestick: Summary

Finally, a single candle line that works! In theory, the Takuri line candle should act as a bullish reversal and it does, 66% of the time, placing its rank at 18 out of 103 candle patterns, where 1 is best. Its frequency rank is 28, so you should be able to find it often in a historical price series. However, the overall performance ranks 47, which is about mid way down the performance list. Thus, even though price may reverse the downward price trend often, price does not trend far after that.

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My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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Takuri Line Candlestick: Important Results

Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 66% of the time
Frequency rank: 28
Overall performance rank: 47
Best percentage meeting price target: 82% (bull market, up breakout)
Best average move in 10 days: -4.45% (bear market, down breakout)
Best 10-day performance rank: 39 (bull 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 Takuri line candlestick
Takuri Line
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Takuri Line Candlestick: Discussion

As I mentioned in the introduction to the Takuri line, it works as a bullish reversal of the prevailing downward price trend 66% of the time. That means two of every three trades will show a reversal. Unfortunately, the new trend does not last long, if the overall performance rank of 47 has meaning.

The best move over 10 days comes after a downward breakout in a bear market. Price drops by 4.45%. Using the height of the candle projected in the direction of the breakout shows that the new price trend meets the target 82% of the time. That is not a bad score, but it falls short of the 90% plus values that other candle patterns achieve.

Takuri Line Candlestick: Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternDownward.
ConfigurationA small bodied candle with a lower shadow at least three times the height of the body and little or no upper shadow.
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Takuri Line 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. Look for the Takuri line as part of a downward retracement in an up trend -- page 724.
  2. To confirm a Takuri line, wait for price to close higher the next day -- pages 724-725.
  3. Takuri lines within a third of the yearly high tend to act as reversals most often -- page 727.

Takuri Line Candlestick: Example

The Takuri line candlestick on the daily scale

The chart shows two examples of Takuri lines on the daily scale. Candle A appears in a downward price trend with a long lower shadow.

This Takuri line has a small upper shadow, but it is small enough that it poses no bother. Price breaks out upward the next day when it closes above the top of the candlestick.

Candlestick B is another Takuri line. It appears after a downward trend has finished and it also has a long lower shadow, but a nubbin of an upper shadow. The breakout from B is also upward and that happens three days later with a tall white candle, called an opening white marubozu.

The bodies of both Takuri lines are white, but they can be any color, by the way...

 

-- Thomas Bulkowski

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Other Takuri Line Examples

See Also

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