As of 09/29/2022
  Indus: 29,226 -458.13 -1.5%  
  Trans: 12,258 -199.22 -1.6%  
  Utils: 906 -38.84 -4.1%  
  Nasdaq: 10,738 -314.13 -2.8%  
  S&P 500: 3,640 -78.57 -2.1%  
YTD
-19.6%  
-25.6%  
-7.6%  
-31.4%  
-23.6%  
  Targets    Overview: 09/15/2022  
  Up arrow32,000 or 29,200 by 10/15/2022
  Up arrow13,800 or 11,800 by 10/15/2022
  Up arrow990 or 900 by 10/15/2022
  Up arrow11,975 or 10,700 by 10/15/2022
  Up arrow3,800 or 3,500 by 10/15/2022
CPI (updated daily): Arrows on 9/13/22
As of 09/29/2022
  Indus: 29,226 -458.13 -1.5%  
  Trans: 12,258 -199.22 -1.6%  
  Utils: 906 -38.84 -4.1%  
  Nasdaq: 10,738 -314.13 -2.8%  
  S&P 500: 3,640 -78.57 -2.1%  
YTD
-19.6%  
-25.6%  
-7.6%  
-31.4%  
-23.6%  
  Targets    Overview: 09/15/2022  
  Up arrow32,000 or 29,200 by 10/15/2022
  Up arrow13,800 or 11,800 by 10/15/2022
  Up arrow990 or 900 by 10/15/2022
  Up arrow11,975 or 10,700 by 10/15/2022
  Up arrow3,800 or 3,500 by 10/15/2022
CPI (updated daily): Arrows on 9/13/22

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.

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Tall Candle Setup: Trading Minor Highs

Tall Candle Setup: Trading Minor Lows

-- Thomas Bulkowski

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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.
Legal notices: "As an Amazon Associate I earn from qualifying purchases." Paid links).

My novels:  Bedroom to Boardroom book Remember Me book Bumper's Story book Head's Law book
My stock market books:  Chart Patterns: After the Buy Getting Started in Chart Patterns 2nd edition book Trading Basics book Fundamental Analysis and Position Trading book Swing and Day Trading book Encyclopedia of chart patterns book Encyclopedia of Chart Patterns 3rd Edition book Trading classic chart patterns book

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