Kicking Candlestick Pattern

Among the technical analysis tools available is the kicking candlestick pattern, which indicates a potential trend change. These patterns consist of a long (either bullish or bearish) candle followed by a shorter candle that “kicks” or gaps above or below the previous candle’s body.

If these patterns appear after a prolonged trend in the opposite direction, they are much more noteworthy. Additionally, they can be used in combination with other technical indicators to confirm a possible reversal. Below is a review of the kicking candlestick pattern as well as trading strategies for it.

What is a Kicking Candlestick Pattern

As a reversal pattern, the kicking candlestick may be either bullish or bearish, depending on the market context. A bullish-kicking candlestick pattern occurs when the price of a currency pair has increased sharply in a short period of time, signaling a strong bullish sentiment in the market. It features a long green candle at the beginning, a shorter red candle with a smaller body, and a long wick at the end. This pattern shows that the bulls are in charge and that the price is likely to keep going up.

A bearish kicking candlestick pattern is the reverse of a bullish kicking candlestick pattern. When the price of a currency pair falls dramatically in a short period of time, it indicates a strong bearish sentiment in the market. You may recognize it by the long red candle at the top, followed by the shorter green candle with a small body and long wick. The bears have gained control of the market, and the price is expected to continue to drop based on this pattern.

Kicking Candlestick Pattern Strategy

To trade this pattern, traders may watch for the appearance of a bullish kicking candlestick pattern and then place a long position after this pattern has formed. The reversal should be confirmed by further price action, such as a break above the high of the kicking candlestick or a higher closing the next day.

If the expected reversal does not occur, traders may limit their losses by placing stop-loss orders below the bottom of the kicking candlestick. If you want to be sure the market is ready for a bullish reversal, you should follow the market trend and any significant technical indicators. The bearish-kicking candlestick pattern can also appear to signal a reversal in an uptrend, so keep an eye out for them. When a bearish kicking candlestick pattern appears, traders may open a short trade and set stop loss orders above the high of the kicking candlestick.

Buy Signal

Kicking Candlestick Pattern
Kicking Candlestick Pattern Buy Signal
  • A buy signal is obtained when a long red candle is followed by a green candle that opens under the closing of the previous red candle.
  • When this pattern occurs on the chart, traders may enter buy positions.
  • Traders should put stop-loss orders below the bottom of the kicking candlestick to minimize potential losses if the expected reversal does not occur.

Sell Signal

Kicking Candlestick Pattern
Kicking Candlestick Pattern Sell Signal
  • A sell signal is obtained when a long green candle is followed by a red candle that opens higher than the closing of the previous green candle.
  • When this chart pattern occurs, traders may consider selling or shorting their positions.
  • Traders should put stop-loss orders above the high of the kicking candlestick to minimize potential losses if the expected reversal does not occur.

Kicking Candlestick Pattern Pros & Cons

Pros

  • It is an indication of a potential trend reversal.
  • It is easy to identify on the charts and it is also compatible with other technical analysis methods and indicators.

Cons

  • It is not a very common pattern
  • It is not a standalone signal.
  • It is a short-term indication and should not be utilized to make long-term trade decisions.
  • Especially if the pattern forms in a weak market or moves sideways, it could send out a false signal.

Conclusion

As a reversal pattern, the kicking candlestick may be either bullish or bearish, depending on the market context. Traders may see this chart pattern as a sign to sell or buy the corresponding currency pair. But keep in mind that other technical analysis methods must be used to confirm this pattern before making any trading decisions.

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