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Written and copyright © 2008-2009 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.
Few people will search for the bearish side by side white lines because the name is too long to remember. The candlestick pattern functions as a bearish continuation pattern
but only about randomly. With the frequency rank of 86th out of 103 candlestick types, it will be difficult to find one to trade anyway. However, once the breakout occurs, price
trends to trend if you can believe the high overall performance rank. Unfortunately, the sample count is too small to get an accurate gauge of how the bearish side by side white lines
really work.
Important Results
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Theoretical performance: Bearish continuation
Tested performance: Bearish continuation 56% of the time
Frequency rank: 86
Overall performance rank: 29
Best percentage meeting price target: 71% (bear market, down breakout)
Best average move in 10 days: 7.86% (bear market, up breakout)
Best 10-day performance rank: 7 (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.
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 Bearish Side by Side White Lines
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Discussion
The bearish side by side white lines acts in reality like theory suggests, as a bearish continuation pattern but only 56% of the time. That is what I call "near random." The overall
performance rank of 29 is quite high, so the post breakout trend might be a good one. However, with a frequency rank of 86, you probably won’t find any to trade.
The best average move 10 days after the breakout is a rise of 7.86% in a bear market. That ranks 7th where 1 is the best performance. I consider moves of 6% or higher to be good ones,
so the bearish side by side white lines blows past that benchmark.
Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Three. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for a black candle in a downward price trend. Following that, find two white candles with bodies about the same size and similar opening prices.
The closing prices of both white candles must remain below the body of the black candle. |
Three Trading Tidbits
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.
- Bearish side by side white lines candles that have tall upper shadows perform best -- page 680.
- Select tall candles for the best performance -- page 679.
- Bearish side by side white lines within a third of the yearly low tend to act as continuations most often -- page 682.
Example
The bearish side by side white lines appears circled in red on the daily scale. Price trends downward leading to the candle pattern when a black
candle appears in the night sky. The next day, two white candles brighten the day with bodies about the same size, similar opening prices, and bodies that remain below the body of
the first day -- the black candle.
The breakout from this bearish side by side white lines candle pattern is downward, joining the downtrend already in progress. That means this bearish side by side white lines
acts as a continuation of the move toward zero. Incidentally, a downward breakout occurs when price closes below the bottom of the candlestick pattern.
Given that the bearish side by side white lines candlestick breaks out downward slightly more often than upward, this candle pattern would do best in the setup shown. After the
candle completes, the stock joins a downward price trend already underway.
-- Thomas Bulkowski
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