As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
In my book,
Encyclopedia of Candlestick Charts
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.
As I create these candlestick pages, I am reminded that candles usually obey the prevailing price trend. In this case, the matching low candlestick is supposed to be a bullish reversal on the idea that the stock closed at the same price twice. It is a support zone. Testing reveals that the pattern pushes through this support and acts as a bearish continuation 61% of the time.
The surprising news about this candlestick pattern is how well price trends after the breakout, ranking 8th out of 103 candlestick types where 1 is best. Let's take a closer look at the matching low.
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Theoretical performance: Bullish reversal
Tested performance: Bearish continuation 61% of the time
Frequency rank: 58
Overall performance rank: 8
Best percentage meeting price target: 69% (bull market, up breakout)
Best average move in 10 days: 7.15% (bear market, up breakout)
Best 10-day performance rank: 13 (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. |
 Matching Low
|
The matching low candlestick has potential, as the introduction described. The candle is supposed to be a bullish reversal, but instead acts as a bearish continuation 61% of the time. It has a frequency rank of 58, which is about mid list. You will be able to find this candle pattern in a historical price series, but it won't be easy. The overall performance has a rank of 8 where 1 is best. That is excellent. The best average move is 7.15%, ranking 13th, where I consider 6% as being a good move.
The matching low candlestick does best after an upward breakout. Since price trends downward into the candle, that would mean the best performance comes when the candle acts as a reversal and not a continuation.
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for a black candle with a tall body. Following that, find a black body with a close (not the low) that matches the prior close. |
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.
The chart shows a matching low candlestick pattern, circled in red on the daily chart. The price trend leads downward to the matching low candles which are both black. The first candle has a tall body, but the second need not. The closing price is what matches in the matching low, not the low price. Go figure.
The matching low in this example acts as a reversal candle. Why? Price trends downward into the candle pattern and breaks out upward. Thus, the direction changes from down to up. In fact the candle lows act as a support zone, highlighted here by the horizontal red line.
Notice how the breakout from the matching low candlestick creates an upward price trend that joins with the existing up trend? That is the trading setup that works best. Trade with the tend. The candle appears as a downward retracement in an upward price trend. Look for that setup and be rewarded.
-- Thomas Bulkowski
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