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Written and copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved.
In my book,
Encyclopedia of Candlestick Charts  , pictured on the right,
I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines
in the tests.
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.
The concealing baby swallow candlestick is so rare that I found only 4 of them out of over 4.7 million candle lines. That was not enough samples to justify including statistics in my
Encyclopedia of Candlestick Charts book. Thus, this candlestick is probably one you can ignore because you will see only a handful in your lifetime.
Concealing Baby Swallow Important Results
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Theoretical performance: Bullish reversal
Tested performance: Bearish continuation 75% of the time
Frequency rank: 103
Overall performance rank: 101
Best percentage meeting price target: 67% (bull market, down breakout)
Best average move in 10 days: -7.10% (bull market, down breakout)
Best 10-day performance rank: 3 (bull 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.
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 Concealing Baby Swallow
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Concealing Baby Swallow Discussion
As I mentioned, I found just four concealing baby swallow candlestick patterns when I researched my Encyclopedia of Candlestick Charts book, so there is not much to tell.
The pattern is supposed to be a bullish reversal, but I found it acts as a bearish continuation 75% of the time. The frequency rank is dead last, at 103, and the overall performance
rank is almost as bad: 101 where 1 is best. The reason for the poor performance is because the measure uses four categories and I only found concealing baby swallow candles in two
of them, so zeros were added in. That hurt performance.
The move 10 days after a breakout shows price dropping 7.10% in a bull market. I consider anything above 6% to be good, so this is excellent. The performance ranks 3rd, which is
almost the best seen (a rank of 1).
Concealing Baby Swallow Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Four. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for four black candles. The first two are long black marubozu candles followed the next day by a candle with a tall upper shadow.
The candle gaps open downward but price trades into the body of the prior day. The last candle engulfs the prior day, including the shadows (a higher high and lower low than the prior day). |
Concealing Baby Swallow Example
The chart shows a concealing baby swallow candlestick, circled in red, on the daily scale. All four candles are black with the first two being
tall black marubozu candles. The next day, price gaps open lower, but climbs into the body of the prior day before closing down for the day. The next day has a high price that meets or exceeds the prior
day's high and a lower low. The price trend leading to the concealing baby swallow is downward and so is the breakout. This candle acts as a continuation of the downward price trend.
-- Thomas Bulkowski
Copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved. I'm not tense, just terribly, terribly alert.
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