This candlestick patter typically uses four candles. The first three are small bearish moves to the down side with smaller bodies and gap downs with each. Then comes the fourth candle, which is a large bullish candle and it engulfs all three of the previous candles and closes above the first bear candle.
When looking at the fourth candle and when it closes above the three bearish candles, you want to also be sure to check volume to see if people are behind this move or if it may be an anomaly on the radar. This candlestick pattern is not common so be sure to research how to use it and what it may signal for your current trading situation.
There are multiple trading and candlestick patterns out there, but they are not one hundred percent, rather signal a reason to pay closer attention. Be sure to research and fully understand before implementing them and making them a live part of investing or trading strategies.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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