(Bearish)
Wash 'n' Rinse |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bearish
Prior Trend of Candlesticks: Bullish
Reliability of Candlesticks : 2nd Grade
Confirmation of Candlesticks: Reliable
Candlestick Patterns Key Reference |
DESCRIPTION
(Bearish) Wash 'n' Rinse pattern is an extremely reliable indication from a top reversal into a long term downtrend.
You can identified it as a double top and supported by a long shadow.
PATTERN RECOGNITION
1. (Bearish) Wash 'n' Rinse pattern can be identified by a uptrend followed by a top reversal.
2. Refering to above diagram, firstly we will see a bullish candlestick then the second candlestick open with a gap up and then test at a new high which form a long shadow before returning as a dark cloud pattern or some other bearish reversal pattern.
3. After a few candlesticks later, we will see another new high is tested before gapping away which form a long shadow and then trend down for the long term downtrend.
EXPLAINATION
The (Bearish) Wash 'n' Rinse pattern is formed at the top of a uptrend.
It looks like a double top which you can identified by its long shadows.
A new high is tested and form a Dark Cloud Pattern or other Bearish reversal pattern which form a long shadow.
Then after a few candlesticks later, new high is tested again but this time buyers again have no strength to push the price further up which form a double top with a long shadow.
Having said that, it
clearly indicated that buyers have no strength and sellers are pushing the price down showing that bear is now in control.
The 2nd grade reversal patterns are reliable group of reversal patterns.
POINT TO NOTE
Refering to above diagram, we should note that the first candlestick retest and break a new high which form a long shadow.
After a few candlesticks later, it break another new high which form a long shadow again which often occur at extreme level of resistance level.
(Bearish) Wash 'n' Rinse pattern looks like a double top pattern but it is identified by long shadows.
CANDLESTICK PATTERNS KEY REFERENCE
Irrespective of Color (Can be bullish or bearish) |
Uptrend |
Consolidation |
Downtrend |
ANTICIPATED DIRECTION OF TREND
Lighter Arrow = Lower Probability
Solid Arrow = Higher Probability
More Likely to go sideway, Less likely to rally
|
More likely to rally, Less likely to go sideways
|
More likely to go sideway, Less likely to fall
|
More likely to fall, Less likely to go sideways |
