(Bearish)
Eighth Candle Reversal |
Characteristic of Candlesticks: Reversal
Relevance of Candlesticks: Bearish
Prior Trend of Candlesticks: Bullish
Reliability of Candlesticks : Confirmation Required
Confirmation of Candlesticks: Suggested
Candlestick Patterns Key Reference |
DESCRIPTION
Bearish Eighth Candle Reversal pattern consists of eight candlesticks.
Bearish Eighth Candle Reversal is a reliable pattern that signal traders to know when a trend may end or reverse.
It can be used as an entry after consolidation period or retracement.
PATTERN RECOGNITION
1. Bearish Eighth Candle Reversal pattern can be identified by an uptrend.
2. Refering to above diagram, we will see seven consecutive bullish candlesticks.
3. Then we will see the the eight bearish candlestick open slightly below the close of the previous candlestick and close slightly below the previous candlestick's open.
EXPLAINATION
The Bearish Eighth Candle Reversal pattern allow traders to anticipate when a trend may end or reverse.
The eight bearish candlestick which closes slightly above the previous open give a signal to buyers that the bullish momentum has come to the end of an uptrend.
The Consolidation Patterns imply that the trend may have ended and may go sideways. There is a possibility of a reversal but would require confirmation in the next session.
POINT TO NOTE
A confirmation of trend reversal is required in a form of a bearish candlestick which open below or a gap down the previous candlestick close.
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 |
