As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20
As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20

Bulkowski's Tall Candle Setup

 

Tall Candle Setup: Summary

Research shows that a tall price bar (candle line) indicates that the stock will reverse direction between 67% (uptrends) to 72% (downtrends) of the time, plus or minus one day. This finding is invaluable for swing traders, and other traders can profit from the knowledge as well.

$ $ $

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

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

 

Details
Recognition Rules
Trading Minor Highs
Trading Minor Lows
See Also

Tall Candle Setup: Details

Research I conducted shows that tall candles (price bars) often, but not always, indicate a short-term trend change, that is, they tell when a minor high or minor low is forming. Traders can use this information to help time their trades. The method will not detect all trend changes nor will it signal perfectly. Nevertheless, knowing when price may form a minor high or minor low can help prevent you from trading just before a reversal.

Here are the recognition rules:

Tall Candle Setup: Recognition Rules

  1. Look for price trending upward (for minor highs) or downward (for minor lows).
  2. Determine if today shows a tall candle by computing the average height of the preceding 22 trading days (do not include today's candle). That is, subtract the low price from the high for each of the past 22 days and average the result. This is the average candle height. I tested the 22 day period and found it worked best among 3-5, 10, and 22 days. Verify the 22 day look back period works best for your security.
  3. Compare today's candle height (high-low range) with the average candle height. If today's height is more than 146% above the average candle height, then you have a tall candle. Tall candles are more likely to appear within a day of minor highs and minor lows (that is, one day before to one day after the tall candle). The 146% number is the median height of all tall candles found by research. You might want to test different values.

Top of page More

Tall Candle Setup: Trading Minor Highs

Tall Candle Setup: Trading Minor Lows

-- Thomas Bulkowski

Top of page More

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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