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. 


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.

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