Side by Side Candlestick Pattern

The Side by Side Candlestick Pattern, also known as the Hidekishi Pattern, is a technical analysis tool used in Forex trading to identify potential trend reversals. It is believed to have originated in Japan, where it is referred to as the Harami pattern, which means “pregnant” in Japanese.

The Side by Side Candlestick Pattern is formed when a small candlestick, known as the “inside candlestick“, is completely contained within the range of the preceding large candlestick, known as the “outside candlestick”. This pattern indicates indecision in the market and a potential reversal of the current trend.

What is the Side by Side Candlestick Pattern?

The Side by Side Candlestick Pattern is tool that is used to identify potential trading opportunities in the market. It is called a “Side by Side” pattern because it involves two candlesticks that are “side by side” on a chart, typically with the same open and close prices. This pattern can provide clear signals for both buy and sell positions, which is why it is popular among traders.

To effectively use the Side by Side Candlestick Pattern as a trading strategy, you need to pay attention to the following characteristics:

The two candlesticks should be of the same type, either both bullish or both bearish.
The two candlesticks should have the same open and close prices, indicating indecision or a lack of direction in the market.
The two candlesticks should be “side by side,” meaning that they are adjacent to each other on the chart.

traders should pay attention to the following three points:

  • The color of the inside candlestick, if the inside candlestick is white, it indicates buying pressure and a potential reversal of a downtrend. If the inside candlestick is black, it indicates selling pressure and a potential reversal of an uptrend.
  • The size of the inside candlestick, the smaller the inside candlestick, the stronger the potential trend reversal.
  • The location of the inside candlestick, if the inside candlestick is located near the top or bottom of the outside candlestick, it indicates a stronger potential trend reversal.

Side by Side Strategy

Bullish Side by Side Candlestick Pattern

  • A white inside candlestick contained within a black outside candlestick, indicating a potential reversal of a downtrend.
  • A small inside candlestick, indicating a strong potential trend reversal.
  • An inside candlestick located near the bottom of the outside candlestick, indicating a strong potential trend reversal.
Bullish Side by Side
Bullish Side by Side

Bearish Side by Side Candlestick Pattern

  • A black inside candlestick is contained within a white outside candlestick, suggesting that an uptrend may be reversed.
  • The size of the inside candlestick is small, which implies a strong potential trend reversal.
  • The inside candlestick is located near the top of the outside candlestick, indicating a strong potential trend reversal.
Bearish Side by Side
Bearish Side by Side

Side by Side Candlestick Pattern Pros & Cons

Pros

  • Offers distinct signals for entering long and short positions
  • Due to its pattern versatility it can be applied to any time frame in the market
  • It produces basic signal thus it is easy to identify and understand

Cons

  • Hard to identify when the market is ranging
  • Few uses this strategy as it consumes a lot of time to spot the trend pattern

Conclusion

Side by Side Candlestick pattern is based on the Harami Candlestick pattern developed by a Japanese trader, it could possibly provide strong signal for trend reversal at it has 3 more candles to follow as a conjunction indicator for its pattern to be completed, always remember that trading patterns is has no guaranteed results thus always confirm the signal it provide with other trend reversal indicators available in the market.

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