|By Nathan Young|
June 27, 2017
The stick sandwich pattern certainly has a humorous name, but patter happens relatively frequent and should be spotted with ease. Searching for the patter, there are three candles involved, with a bearish, then bullish, followed by a bearish, forming the sandwich.
This is typically used in a potential trend reversal, but happens also in a trend and offers a trend continuation. Looking for the formation alone may not be enough because there are so many other factors to include when evaluating a trend change, such as volume, fundamental health, and if there is news and the horizon.
As with many patterns and indicators, they do not often pose a one hundred percent guarantee of happening. Alternatively, you should be looking at these as a note or reminder to stop and take a look at the company for potential investments.
While looking at trend reversal, you can look at this as a potential take profit for people who have been riding the train and simply want to exit. This is when volume comes in handy because if the trend is changed on higher volume, this could indicate more people in the opposite direction could have entered the market.
Be sure to test this on a demo account and see if it fits your current trading style. Look on the Internet and see how other people utilize this candlestick pattern, forming it to yourself. If you find it does not fit your current style, you now have the knowledge to take with you further and apply it in other areas of your trading and investing.