As of 01/17/2025   Indus: 43,488 +334.70 +0.8%     Trans: 16,431 -169.75 -1.0%     Utils: 1,013 +1.53 +0.2%     Nasdaq: 19,630 +291.91 +1.5%     S&P 500: 5,997 +59.32 +1.0%	YTD  +2.2%    +3.4%    +3.0%    +1.7%    +2.0%	Targets    Overview: 01/15/2025     44,700 or 41,600 by 02/01/2025   17,200 or 15,700 by 02/01/2025   1,050 or 950 by 02/01/2025   20,500 or 18,670 by 02/01/2025   6,100 or 5,700 by 02/01/2025
Chart Pattern Indicator: on 1/13/25

As of 01/17/2025   Indus: 43,488 +334.70 +0.8%     Trans: 16,431 -169.75 -1.0%     Utils: 1,013 +1.53 +0.2%     Nasdaq: 19,630 +291.91 +1.5%     S&P 500: 5,997 +59.32 +1.0%	YTD  +2.2%    +3.4%    +3.0%    +1.7%    +2.0%
Targets    Overview: 01/15/2025     44,700 or 41,600 by 02/01/2025   17,200 or 15,700 by 02/01/2025   1,050 or 950 by 02/01/2025   20,500 or 18,670 by 02/01/2025   6,100 or 5,700 by 02/01/2025
Chart Pattern Indicator: on 1/13/25

Bulkowski on the 2-Tall Pattern

Initial release: 12/27/24.

The 2-tall pattern is a variation of the 2-dance pattern. While investigating the 2-dance, I found that the 2-tall pattern outperforms, so this sheet takes a closer look.

Summary Introduction Identification, Trading Target Exit Testing Target Exit, Stock Performance Target Exit, ETF Performance Target Exit, Cryptocurrency Performance See Also

2-Tall

2-Tall: Summary

The 2-tall pattern is a double bar pattern, with both bars at least twice (or 1.5x) as tall as the one-month average height. Because of the height, it'll be hard to find in ETFs and cryptocurrency.

In stocks, though, it performs well regardless of the inbound price trend. However, you'll find that, on average, 2-tall patterns acting as reversals of the downtrend do best.

2-Tall: Introduction

The 2-tall pattern is easy to recognize, and the charts accompanying this article give examples. Look for two adjacent price bars that are unusually tall. What does unusually tall mean?

I computed the average height of the price bars a month (22 price bars) before the start of the 2-tall pattern. The 2-tall pattern has a height that is at least twice as tall as the average, but even 1.5 times the height works well and more prolific. Both price bars must meet the minimum height restriction.

I only tested upward breakouts from the pattern, not downward ones.

2-Tall: Identification and Trading Guidelines

For finding and trading the 2-tall pattern, the following table shows suggestions.

2-Tall: Target Exit Testing

To test the 2-tall pattern, I used the same method as I used to test other small patterns. Once identified as a valid 2-tall pattern (meaning two tall (at least twice the 1-month average height) and adjacent price bars), I used a buy stop placed a penny above the top of the highest bar in the pattern. A stop loss placed a penny below the bottom of the price bar helped limit any loss. I sold the security if it reached a price that was at least twice as high as the 2-tall pattern added to the top of it. See the adjacent figure. The height of the pattern is the vertical distance between the two green lines (highest price bar to lowest price bar in the pair).

Because I used the daily chart, I discarded any trade which showed a buy and sale on the same day. In actual trading, you might find that a trade entry and exit triggered on the same day, but I couldn't tell which came first, so I disallowed the condition.

In the tests that follow, I measured only upward breakouts in bull markets. The benchmark uses the same securities as the 2-tall but picks two adjacent, any size, price bars, selected so their number didn't overload the spreadsheet (meaning I skipped x number, picked one, skipped another x number, and so on). I tested from 1990 to December 2024, in many securities. Few securities had data over that entire span. Also, at the time the pattern appeared, the low price had to be above $5 (meaning no penny stocks).

2-Tall: Target Exit, Stock Performance

Notice how tall the 2-tall pattern is in the example in 3M stock. Such a tall pattern makes for a far-away target. If the stock reaches the target, the profits will be better than with closer targets (such as we see with the benchmark).

The day after the 2-tall pattern appears, the stock breaks out upward and we buy in (using a buy stop that waits for price to reach or exceed a penny above the top of the 2-tall pattern.

A stop loss order sits a penny below the bottom of the lower of the two price bars.

In this example, the stock climbs far enough to trigger the limit order at the exit price.

The following table shows the trading results using the testing method already described.

With thousands of trades, the 2-tall pattern substantially outperforms (by about 3 to 1) the benchmark pattern. The 2-tall in a downtrend does even better, with a per-trade average profit of $214.49 versus $68.70 for the benchmark.

2-Tall: Target Exit, ETF Performance

This trade in an exchange traded fund looks similar to the prior chart in that we're dealing with tall price bars in the 2-tall pattern. The breakout is upward when the stock touches the price of the buy stop.

In this example, the stock drops to the stop-loss order, which triggers a losing trade.

This is the same test as the prior one except I used 94 exchange traded funds (ETFs) instead of common stocks.

The results of good performance continue in ETFs, at least for the pattern in uptrends ($179.25 versus $48.84). In downtrends, you'll want to avoid trading the pattern because it loses $42.03, on average, each trade.

Please note that the number of 2-tall trades are few compared to the benchmark. You'll find it rare that exchange traded funds make large daily price swings because they are composed of many securities. I think that's why the 2-tall pattern has few trades.

2-Tall: Target Exit, Crypto Performance

Here's another example of the 2-tall pattern, except it appears in a cryptocurrency.

Entry happens the day after the 2-tall pattern completes with an upward breakout. A stop loss is in place to help limit losses (compared to a mental stop, held in your head). The target is twice the height of the 2-tall pattern added to the top of it. The currency rises far enough to trip the limit order for a tidy profit.

Don't be excited by the huge performance of the 2-tall pattern in cryptocurrencies. Why? Because trades are few, at 58 in uptrends and only 10 in downtrends. I'd ignore the results if you want to hang onto your wallet, purse, or your shirt/blouse.

The few trades wallop the benchmark, however, with the average trade gaining $779.98 versus the benchmark $214.65. I think patterns like the 2-tall are rare in crypto-land because of their height. The price bars in Crypto can be quite tall so expecting two of them to be twice as tall as the average is, well, a tall order. Do you see how I worked tall in there?

-- Thomas Bulkowski

See Also

• Small pattern performance.
• Updated daily list of short patterns.
• 2-line candlestick patterns
• How did I test small patterns in stocks, ETFs, and cryptocurrency?

These are two-bar price patterns.

• 2-dance
• 2-did
• Hook reversal, uptrend
• Hook reversal, downtrend
• Key reversal, uptrend
• Key reversal, downtrend
• Inside Days
• Outside Days
• Open-close reversal, uptrend
• Open-close reversal, downtrend
• Pipe top
• Pipe bottom
• Pivot point reversal uptrend
• Pivot point reversal, downtrend
• Upside weekly reversals
• Downside weekly reversals

I have flabby thighs, but fortunately my stomach covers them.