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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.
Finally, a single candle line that works! In theory, the Takuri line candle should act as a bullish reversal and it does, 66% of the time, placing its rank at 18 out of 103 candle
patterns, where 1 is best. Its frequency rank is 28, so you should be able to find it often in a historical price series. However, the overall performance ranks 47, which is about mid way
down the performance list. Thus, even though price may reverse the downward price trend often, price does not trend far after that.
Takuri Line: Important Results
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Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 66% of the time
Frequency rank: 28
Overall performance rank: 47
Best percentage meeting price target: 82% (bull market, up breakout)
Best average move in 10 days: -4.45% (bear market, down breakout)
Best 10-day performance rank: 39 (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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 Takuri Line
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Takuri Line: Discussion
As I mentioned in the introduction to the Takuri line, it works as a bullish reversal of the prevailing downward price trend 66% of the time. That means two of every three trades will
show a reversal. Unfortunately, the new trend does not last long, if the overall performance rank of 47 has meaning.
The best move over 10 days comes after a downward breakout in a bear market. Price drops by 4.45%. Using the height of the candle projected in the direction of the breakout shows that
the new price trend meets the target 82% of the time. That is not a bad score, but it falls short of the 90% plus values that other candle patterns achieve.
Takuri Line: Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | One. |
| Price trend leading to the pattern | Downward. |
| Configuration | A small bodied candle with a lower shadow at least three times the height of the body and little or no upper shadow. |
Takuri Line: 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.
- Look for the Takuri line as part of a downward retracement in an up trend -- page 724.
- To confirm a Takuri line, wait for price to close higher the next day -- pages 724-725.
- Takuri lines within a third of the yearly high tend to act as reversals most often -- page 727.
Takuri Line: Example
The chart shows two examples of Takuri lines on the daily scale. Candle A appears in a downward price trend with a long lower shadow.
This Takuri line
has a small upper shadow, but it is small enough that it poses no bother. Price breaks out upward the next day when it closes above the top of the candlestick.
Candlestick B is another Takuri line. It appears after a downward trend has finished and it also has a long lower shadow, but a nubbin of an upper
shadow. The breakout from B is also upward and that happens
three days later with a tall white candle, called an opening white marubozu.
The bodies of both Takuri lines are white, but they can be any color, by the way...
-- Thomas Bulkowski
Other Takuri Line Examples
Copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved. Allow me to introduce my selves.
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