What is a 'Sushi Roll'

Sushi roll is a candlestick pattern consisting of 10 bars where the first five, the inside bars, are confined within a narrow range of highs and lows and the second five, or the outside bars, engulf the first with both a higher high and lower low. If a sushi roll appears in a prevailing trend, it is a sign that there may be an upcoming trend reversal. 

BREAKING DOWN 'Sushi Roll'

A sushi roll involves looking at the most recent five increments of time, and comparing them to the previous five-increment period. This analysis would typically look at a rolling five-day period. For a more condensed view, an analyst can also look at five ten-minute bars.

Sushi roll analysis is used to try to predict market tops and bottoms. It is seen as an early-warning indicator of an impending shift in market direction.

The sushi roll pattern is similar to a bearish or bullish engulfing pattern, except that it is composed of multiple bars instead of a pattern of two single bars. This pattern was named a sushi roll by Mark Fisher in his book, "The Logical Trader." Fisher created an investment philosophy which he called the ACD system, and this system is described in detail in his book. The sushi roll is mentioned by Fisher as one of the basic components of his ACD system.

Sushi Roll and Inside Price Bars

While the inside price bars can be viewed on their own to provide clues as to market conditions and upcoming movements, taking a more comprehensive look that incorporates a multiple grouping of bars to identify patterns and trends. Inside bars represent relatively stable activity, and periods of lower volatility. This can signify a phase where traders are being cautious and are hesitant to take action. A savvy investor may view this period of indecision by the competition as a time of opportunity.

A sushi roll may sound like something tasty that you would have as a snack, and in fact there are actually several varieties of edible sushi rolls, but in this context it refers to a stock activity pattern which is used to analyze a stock’s performance and try to predict upcoming trends.

Despite their similar sounding names, a sushi roll and a sushi bond are not related at all. A sushi bond refers to a bond released by a Japanese issuer in a market outside of Japan, and with a currency that is not the yen.

RELATED TERMS
  1. Outside Days

    Outside days are days where a security's price is more volatile ...
  2. Morning Star

    A bullish candlestick pattern that consists of three candles ...
  3. Hikkake Pattern

    A charting pattern used by technical traders which is used in ...
  4. Inside Day

    A candlestick formation that occurs when the entire daily price ...
  5. Hook Reversal

    Hook reversals are short-term candlestick patterns that predict ...
  6. Evening Star

    A bearish candlestick pattern consisting of three candles that ...
Related Articles
  1. Investing

    Market reversals and how to spot them

    Learn what market reversals are and how to spot them. The sushi-roll indicator may help lower the risk of trying to pick market tops and bottoms.
  2. Small Business

    Economics of Owning a Bar

    Understand what costs go into starting and running a bar, as well as what earnings can be expected. Learn whether or not it is smart to own a bar.
  3. Trading

    Range Bar Charts: A Different View Of The Markets

    While range bars are not a type of technical indicator, traders can employ this useful tool to identify trends and interpret volatility.
  4. Trading

    Two Candlestick Patterns Predicting A Bottom

    This article tries to find some bottoms in four stocks using two different candlestick patterns.
  5. Trading

    Candlestick Charting: What Is It?

    Learn how to read a candlestick chart, as well as spot candlestick patterns that aid in analyzing price direction.
  6. Trading

    Trading the Non-Farm Payroll Report

    Discover how to trade the non-farm payroll report without getting knocked out by the irrational volatility it can create.
  7. Managing Wealth

    The 5 Best Cities to Open a Bar in the US

    Understand what makes a bar successful and what is important about opening a bar. Learn about the top five cities to open a bar in the United States.
  8. Trading

    Technical Analysis: Triple Tops and Bottoms

    Triple and double tops and bottoms may be tough to spot but can be powerful patterns.
RELATED FAQS
  1. What are the differences between a bar chart and candle sticks?

    Explore the difference between bar and candlestick charts. Learn how technical analysts use charts in the analysis of supply ... Read Answer >>
  2. What are the differences between patterns and trends?

    Learn the difference between a pattern and a trend. Explore how technical analysts use patterns and trends to identify trading ... Read Answer >>
  3. What do the different colored candlesticks mean?

    A typical candlestick chart is composed of a series of bars, known as candles, which vary in height and color. Read Answer >>
  4. How are Three Black Crows patterns interpreted by analysts and traders?

    Understand the basics of the three black crows pattern and how analysts and traders interpret this bearish reversal pattern ... Read Answer >>
Hot Definitions
  1. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  4. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  5. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  6. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
Trading Center