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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 White Candle

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Busted
Patterns
Candles Chart
Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/27/2017
20,551 -45.74 -0.2%
8,935 6.33 0.1%
702 -3.50 -0.5%
5,840 11.63 0.2%
2,342 -2.39 -0.1%
YTD
4.0%
-1.2%
6.5%
8.5%
4.6%
Tom's Targets    Overview: 03/14/2017
20,100 or 21,250 by 04/15/2017
8,500 or 9,500 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,275 or 2,425 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.

White Candle: Summary

The white candlestick is just another candle line, unremarkable in many respects. It acts as a continuation 51% of the time, which I consider random, and yet it appears often. The frequency rank is 4 out of 103 candles, where 1 is most frequent. The move over 10 days is well down the list, ranking 68, so the white candle does not lead to powerful moves.

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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.

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

 

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White Candle: Important Results

Theoretical performance: Reversal or continuation (indecision)
Tested performance: Continuation 51% of the time
Frequency rank: 4
Overall performance rank: 68
Best percentage meeting price target: 81% (bull market, up breakout)
Best average move in 10 days: -4.82% (bear market, down breakout)
Best 10-day performance rank: 35 (bear 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 white candlestick
White Candle
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White Candle: Discussion

As I mentioned in the introduction, the white candle acts randomly, tending toward a continuation just 51% of the time. It occurs often, ranking fourth out of 103 candles but the overall performance rank is worse than mid list: 68.

The white candle meets the measure rule target 81% of the time (which is the candle height added to the top or subtracted from the bottom of the candle, depending on the breakout direction). The best move occurs in a bear market after a downward breakout. The average decline over the 10 days after the breakout is 4.82%, placing it 35 where 1 is best. That is not a bad rank, but the best performing candle patterns show declines averaging over 6%.

White Candle: Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternNone required.
ConfigurationAn average height candle with a white body and shadows shorter than the body.
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White Candle: 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. White candles that appear within a third of the yearly low perform best -- page 173.
  2. White candles with tall shadows (taller than the median height) outperform -- page 174.
  3. White candles with breakouts below the 50-trading day moving average tend to perform best -- page 175.

The white candlestick on the daily scale

White Candle: Example

The daily chart of FDX shows two white candles, one at A and the other at, you guessed it, B. They are of average size, white, with upper and lower shadows shorter than the body.

White candle A occurs in a downtrend just two days before the bottom. Candle B occurs in an uptrend after a series of spinning tops highlighted indecision after a strong move up. Price gaps higher after the white candle, suggesting renewed enthusiasm for the stock, but that is short-lived. Price collapses in early April, finding support at the top of the white candle.

-- Thomas Bulkowski

 

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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 found Jesus! He was behind the sofa all the time.