Candlestick Patterns | Bullish Ladder Bottom

Bullish Ladder Bottom

This is a five candlestick pattern that starts with three strong black candlesticks.
The downtrend continues with the fourth lower close. The next day gaps higher and closes much higher than the previous day or two.
This may imply a bullish reversal.

How to identify

  1. 1st three days are red days with lower opens and closes each day.
  2. 4th day is a red day with an upper shadow.
  3. The last day is white that opens above the body of the 4th day.

Psychology

In a downtrend and after moving solidly down for three consecutive days, the bears feel in control.
The 4th day prices trade near the open of the previous day, but close at another new low.
This draws attention to the bears who realize that markets do not go down forever.
If the next day opens higher, then shorts will lock in profits. And if volume is high, then a reversal has probably occurred.

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