Kicker Candlestick Pattern: How to Use Bullish and Bearish Kicker

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Gaps validate the unexpected change in market psychology that defines Kicker patterns. The gap between the two candles is an essential element of this pattern. This gap signifies a sharp disconnect https://1investing.in/ between the closing price of the first candle and the opening price of the next candle. The visible empty space on the chart emphasizes the sudden change in sentiment between the two candles.

Now, depending on how the pattern works in the market you’re investigating, it could actually be that it works better in the opposite way! For example, a large gap to the upside could become a sort of exhaustive gap, where the market simply has depleted all its resources and won’t go higher. These three signs show that the market has acted forcefully, and could help to increase the accuracy of the signal. The overview also encompasses the dynamics of EUR, GBP, JPY, CHF, AUD, Gold, and the S&P 500 index. Find out how the EUR/USD, GBP/USD, USD/JPY, and other currency pairs could change in 2024. In this comprehensive guide, we’ll explain everything you need to know about trading with the Kicker pattern.

  1. The trade realized healthy profits when shares hit a local high of $167.36 in early September.
  2. So to know what the market looked like before the bullish kicker was finalized, we measure the RSI reading on the FIRST candle, which is the bearish candle.
  3. For example, a large gap to the upside could become a sort of exhaustive gap, where the market simply has depleted all its resources and won’t go higher.
  4. TradingView has an indicator known as Kicker Scanner, which scans a chart and identifies bullish and bearish scanners.
  5. Then, immediately following is an opposite-colored candle that gaps sharply against the previous candle’s range.

The gap is also wide, increasing the pattern’s significance and reliability. Following the Bullish Kicker pattern, a vast gap appears, followed by a pair of white candles. Confident investors will be rewarded for trusting this Bullish Kicker.

Bullish Engulfing Candlestick Pattern: What Is and How to Trade

Even the clearest patterns and the best set ups can break down. If you study and practice before making live trades, you’ll set yourself up to be successful. Now, if we want to create a trading strategy where we only enter the market if it has gone down, we could use the RSI indicator as a filter. If we demand that the RSI with its period set to 2 is bullish kicker pattern lower than 20, it means that the market has gone down a bit when we take the trade. The second candlestick continues up, and confirms what the gap above the previous open showed us; namely that bears have lost control and that bulls now are in control. However, when the second candle gets drawn, the tables are turned and the bulls seize control.

Example of a Bearish Kicker Candlestick Pattern

Forget about the platform, take your surfboard instead—the market is beckoning, and the bullish kicker could be what you need to join in on the wave. Ideally, the trend reverses direction following a valid Kicker signal, as enough traders have to have changed positions to force the extreme reversal candle. Since one candle formation can be prone to whipsaws, additional confirmations are recommended.

The first candle in the pattern is a bearish candle, and the second candle is a bullish candle that opens above the previous day’s high and closes above the previous day’s open. This sudden shift in momentum suggests that buyers have taken control of the market, and traders often look for this pattern as a potential signal to enter long positions. During a downtrend, we observe the emergence of the bullish kicker pattern.

Bullish Kicker Candlestick Pattern Strategy

It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career. We also offer real-time stock alerts for those that want to follow our options trades. You have the option to trade stocks instead of going the options trading route if you wish.

To mitigate this potential issue, you could demand that the pattern consists of bigger candles, and performs a bigger gap. That way you might succeed to rule out a couple of those false signals. This pattern implies that there is a change in momentum in an asset and that bulls are starting to come in. As such, it sends a signal that the uptrend will continue for a while.

Following the gap, there are several white candles (and only one red) and the price moves consistently upward. Although the steady uptrend eventually gaps down (and is followed by a strong bearish candle), that jump in price doesn’t dampen the Bullish Kicker’s success. Any investors relying on the pattern’s prophetic reliability would certainly be pleased. Traders should always use multiple technical and fundamental indicators in conjunction with risk management strategies to maximize their chances of success.

In both, these kicker patterns are characterized by a gap that happens between candlesticks. Thus, a bullish candlestick pattern Kicker has been formed on the chart. Thus, we can expect a severe upward correction or even a reversal and the start of a bullish trend. This forms on the price chart during a downtrend when there is an active downward price movement and local lows are formed. First, the first black candle of the pattern appears, then the second candle opens with a large gap upwards and closes in white, showing growth. The “bears” were moving the market down, confident in their strength, but unexpected positive news strongly influenced market participants, and the situation changed dramatically.

A Bullish Kicker Candlestick Pattern appearing alongside high volatility is interpreted as a sign of a significant opportunity for the trend to continue. Bullish kicker candlestick’s accuracy is increased by considering volume, volatility and the strength of the pattern at the time of appearance. However, since the second candle of a bullish kicker is a large bullish one, the RSI reading, once the signal is effectuated, is going to be quite high. As we said, a bullish kicker isn’t dependent on the current trend of the market.

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How to use Bullish Kicker Candlestick Pattern in Technical Analysis??

The other important way to use the kicker pattern is to look at volume. Therefore, on its own, the kicker pattern might give a false signal, which means you should always confirm the reversal. The other approach of identifying the kicker pattern is to visually scan an asset. You can do this as part of your multi-timeframe chart analysis. The kicker pattern means that a financial asset moving in a certain trend is about to turn around and move in the opposite direction. There are several approaches for spotting a reversal in assets like stocks, currencies, crypto, and bonds.

It is a two candlestick pattern so you should have a bearish candlestick followed by a bullish one. A kicker pattern informs you of a strong change in traders attitudes regarding a stock. The release of news or information is usually the cause of a change in traders attitudes. For example, they combine it with other chart patterns like head and shoulders and double-top and bottoms.