- Sentiment: Bullish
- No. of candles: 3
- Direction: Reversal
What Is The Bullish Stick Sandwich Japanese Candlestick Pattern?
The Bullish Stick Sandwich pattern is a bullish reversal pattern that typically forms after a downtrend or during a period of market consolidation.
The Japanese candlestick pattern consists of three candles. The first and third candles are bullish, with similar-sized bodies, indicating buying pressure.
The second candle is a bearish candle with a body that’s longer than the first and third candles, suggesting a temporary increase in selling pressure.
The closing prices of the first and third candles are nearly equal, while the second candle’s low is lower than the lows of the first and third candles.
What Is The Psychology Behind The Bullish Stick Sandwich Pattern?
The Bullish Stick Sandwich pattern reflects a temporary increase in selling pressure within a potential trend reversal.
Initially, the market shows buying interest with the formation of the first bullish candle. The appearance of the bearish candle in the middle signals a surge in selling pressure, possibly due to profit-taking or short-term bearish sentiment.
However, the third bullish candle indicates that buyers have reentered the market and absorbed the selling pressure, possibly leading to a bullish trend reversal.
Japanese Candlestick Charting Techniques, Second Edition
71% OffHow To Trade The Bullish Stick Sandwich Reversal Pattern?
To trade the Bullish Stick Sandwich pattern, wait for confirmation by the third candle.
The buy trigger occurs when the third bullish candle closes above the high of the first candle, confirming the pattern.
Place a stop loss order below the low of the second bearish candle to protect against potential false breakouts or reversals.
As the price moves in your favor, consider using trailing stops or other risk management techniques to lock in profits and minimize potential losses.
Additional Tips
While the Bullish Stick Sandwich pattern can be a reliable reversal signal, it is essential to use it in conjunction with other technical indicators and chart patterns to confirm the trend change.
Additionally, be aware of the overall market context and consider factors such as support and resistance levels, as well as the strength of the prevailing trend.
Keep in mind that no single pattern can guarantee a trend reversal, and proper risk management is always necessary.
Continue to learn about Japanese candlesticks through books, such as Steve Nison’s “Japanese Candlestick Charting Techniques” and “Beyond Candlesticks.”