Stocks & Commodities V. 29:11 (24-26) - The Eight Best-Performing Candles - Candlestick Trading Analysis

Oct 13, 2026

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Candlestick research analyzing the eight best-performing candle patterns reported for Stocks & Commodities (V. 29:11, 24-26) by Thomas N. Bulkowski. The study details methodology based on testing reversal and continuation outcomes using more than 4.7 million price bars across 103 candle patterns, then ranking performance by 10-day breakout moves. Results summarize how specific patterns function as bullish/bearish reversals or continuations and provide criteria for identifying them.

LanguageEnglish

CategoryPresentations

FormatPDF

Pages4

Reading Time2 min

AccessFree to download

Definitions and Methodology

Data scope and testing rules

Continuation vs reversal criteria

Bullish Reversals

Above the stomach

Dragonfly doji

Bullish Continuations

Three inside up

Long black day

Stocks & Commodities V. 29:11 (24-26): The Eight Best-Performing Candles by Thomas N. Bulkowski The Simpler They Are? The Eight Best-Performing Candles After removing rare candlesticks and combining reversal or continuation rates with performance after 10 days, surprising winners emerge. Definitions anD methoDology Describing my testing methodology is necessary so everyone understands my measurement technique. I looked atmore than 4.7 million price bars (candle lines) to identify and track 103 candle patterns. A close above the top of a candle represents an upward breakout. Similarly, a close below the bottom of the candle patternis a downward breakout. That’s true of most candle patterns except for unusually tall ones, such as eight or 13 new price lines, where I used the last price bar upon which to conduct the up or down breakout test. If price entered the candlestick from the bottom but exited out the top, it acted as a continuation. Similarly, if it exited in the same direction that it entered (entering from above and exiting upward, for example), the candle acted as a reversal. To exclude rare candles, I ranked the frequency of each candle found in the same database (500 stocks of 10 years’ duration) . VLAD ALVAREZ Copyright © Technical Analysis Inc. Stocks & Commodities V. 29:11 (24-26): The Eight Best-Performing Candles by Thomas N. Bulkowski I split the frequency rank in half and threw out the rare ones (the rare half) . To find which candles had the best overall performance, I started with the plentiful candles, measured and ranked the reversal or continuation rates, added a rank for the price move after 10 days, and ranked the result. The idea was to find candles that performed best as reversal or continuation patterns, trended far enough in the breakout direction to make money, and appeared often enough to be identified. Here, I describe the top two candles in each category. I have always avoided single-line candles because they tend to act randomly. However, thereis a place for them. FIgure 1: bullIsH reversals. Here you see the top two-performing candlestick patterns that act as bullish reversals. days after the black candle, price has dropped an average of 3.56% in a bull market. In a bear market, the drop averages a more spectacular 5.92%! Placing second for overall performance is the dragonfly doji, and this is the first surprise. In this candlestick, price opensand closesat or Bullish reversals Figure 1 shows the top two candlesticks acting as bullish reversals ofthe downward price trend. To reverse that downtrend, price must close above the top of the candle pattern. “Above the stomach” is a two-line candle that begins with a black candle as the first day. It need not be a tall candle. The second day is a white candle that opens and closes at or above the midpoint of the black candle’s body. It can also be any size. The candle pattern acts as a bullish reversal 66% of the time and price climbs an average of 2.74% after 10 days. That combination wins it first place. Ranking second for performance is near the high for the day while having a long lower shadow. The reversal rate is midrange (ranking 55 out of 103 candles), but the move 10 days later averages 3.89% and helps power this flyer. After an upward price trend, the stock must breakout downward from this doji (qualifying it as a reversal), so look for a close below the bottom of the pattern. Bullish continuations Figure 3 shows the next two surprises for candles that act as continuations of the bullish price trend. For such a simplelooking candle, the long black day is a complicated line. Look for a body that is at least three times the average body height of recent candles but has shadows shorter | Above the stomach | | | Three inside up | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | the “three inside up” candlestick. The first stickisa tall black candle followed by a smal

FAQs

How does the methodology define a bullish or bearish breakout?

A close above the top of a candle pattern is treated as an upward breakout, while a close below the bottom is treated as a downward breakout. This rule applies to most patterns, with special handling for unusually tall candles.

What distinguishes continuation candles from reversal candles?

If price entered the candlestick from the bottom and exited out the top, it is treated as a continuation. If the candle exits in the same direction that it entered (e.g., entering from above and exiting upward), it is treated as a reversal.

How are rare candles excluded from the ranking?

Patterns are ranked by frequency within a database of 500 stocks over 10 years, then the frequency ranks are split in half and the rare ones are discarded.

Oct 13, 2026

Upload by Ophelia