Kicker Candlestick Pattern guidelines
Kicker candlestick pattern is a price charting pattern for securities. It is detectable when there is a reversal in price throughout its distinct two-bar candlestick formation. Kicker patterns are common in the technical analysis world because they are considered predictors for changes in the direction of a price of an asset forecast. In this article, we are going to have a look at the interpretation of the bullish kicker candlestick pattern. We are also going to understand the way to trade this pattern with the aim to provide some inspiration for your trading.
Kicker Patterns guide
What is a kicker candlestick pattern?
Kicker candlestick pattern is a pattern that often forms after a significant downtrend. This is the bullish kicker pattern. But it could also form after an uptrend. This is the bearish candlestick pattern. In brief, a bullish kicker consists of a large bullish candlestick, that comes after the gap to the upside and a bearish candle.
The screenshot above shows a representative chart of the bullish and bearish kicker pattern.
The bullish kicker consists of a big bullish candle, which is led by a widening spread and a bearish candle. Its relevance amplifies when it happens in overbought or oversold zones.
If you identify a bullish kicker after an uptrend, that could be a sign that the market still has enough strength to continue the uptrend.
How to identify this candlestick pattern?
Forex traders can identify either Bullish patterns or Bearish formations of the candlestick on their trading chart.
Bullish kicker formation
Despite the trend, a bullish kicker candlestick pattern is likely to appear, which is a strong bullish sign. Here’s how to identify bullish kickers:
- First, the kicker candlestick pattern starts with a bearish (red) candle.
- The second candle gaps down and open above the close of the previous day.
- It continues upwards and ends with a bullish candlestick.
- The gap has not to be filled by the wick of the second candlestick. Which has a small or nonexistent bottom wick.
Bearish kicker formation
Despite the direction of the trend, a bearish kicker candlestick pattern is likely to emerge. Which is a strong bearish signal. Here’s how to identify a bearish kicker candlestick pattern.
- The first candlestick pattern is bullish (green).
- The second candle bounces and opens above the high of the first candle.
- The same second candle continues lower and became a bearish candle.
- It is important that the top wick of the second candle does not fill the gap.
How to trade the kicker pattern?
For traders searching the kicker candlestick pattern, the price seems to be moving too fast and may be waiting for a pullback. However, these traders may wish they had already established a position when they initially identify the kicker candlestick pattern.
While the kicker pattern is one of the most vital indicators of bullish or bearish sentiment, this pattern is rare. Most professional traders don’t react quickly in one way or another. However, when kicker patterns emerge, fund managers are quick to take notice.
A kicker candlestick pattern is one of the strongest signals available to technical analysts. Its correlation amplifies when it occurs in an overbought or oversold market. The two candlesticks behind the pattern acquire visible meaning. The first candle opens and moves in the direction of the current trend. The second candle opens at the same opening as the previous day and then moves in the opposite direction of the last day of the candle.
Bullish kicker Pattern example
As you can see, the lowest red candle on the chart is followed by an upward gap. A green candle forms a bullish kicker. Although the wick of the second candle is much lower, it does not penetrate the body of the first candle. This is crucial because if this were the case, the bull kicker would not exist as the wick would close the gap between the candles. However, candle wicks can cross. As expected, following the pattern, a reversal occurs and an uptrend begins. Despite being filled with red candlesticks. The bullish move was strong, leading to a sharp increase.
The bullish kicker candlestick pattern is more dramatic on this chart. None of the candles involved have wicks, so the gap between them is noticeable. The gap is also large, adding to the importance and reliability of the pattern. After a bullish kicker pattern, there is a large gap followed by one green candlestick. As it turns out, the signal successfully predicted the future. Trusting this bullish mover, confident investors become rewarded.
In our last example, the two candles have two wicks. It is crucial that the lower wick of the green candle does not extend into the body of the red candle. As you can tell, the signal announces a bullish reversal that will follow. After the gap, there are several green candles (only one red candle) and the price rises steadily. Although a steady uptrend will eventually decline (a strong bearish candlestick comes after). This price rally does not dampen the success of the bullish movers. Any investor who relies on the reliability of the forecasts of that pattern will surely be delighted.
Bearish kicker Pattern example
On many trading platforms such as MetaTrader, the body color of the last candle of the kicker pattern reverses, vividly depicting a dramatic shift in investor sentiment. This is because kicker candlestick patterns only occur after significant changes in investor attitudes. This bearish indication is often studied in conjunction with other indicators of market psychology or behavioral finance.
When traders spot, for example, a bearish kicker pattern on the chart of a particular currency pair. Investors can trade on the next candle after the bearish kicker pattern appears. Stop loss should be placed at the high of the previous candle.
A bullish or bearish kicker is one of the most successful candlestick patterns believed to lead to a bullish or bearish price move. Investors recommend using other technical indicators for accurate acquisition.
The Bullish Kicker is explosive and powerful enough to be ignored. Most traders rank it as one of the most powerful and influential candlestick patterns. So when you spot it, get ready to act! While you would typically confirm a reversal by looking for more bullish movement (continuous uptrend, green candles, upward gap), a bullish kicker candlestick pattern is a powerful indicator change in itself. There is no doubt that buyers are controlling inventory. So if you’re willing to take some risk, you can jump right in.