The accurate interpretation of Candlestick chart patterns can clearly indicate possible forex market reversals to forex traders skilled in using them.
This ancient and well established form of technical analysis can provide the trader with a greater chance of entering into high probability directional positions when trading the forex market.
Candlestick chart patterns range from just a single candlestick to patterns that consist of a grouping of several individual candles.
The Bearish Kicking Candlestick chart pattern is formed from two candlesticks and acts as a reversal pattern that indicates future downside activity in the market with a good probability of making a successful trade.
As with most candlestick patterns, the Bearish Kicking pattern also has a corresponding Bullish Kicking Pattern that indicates a reversal to the upside.
Bearish Kicking Pattern
The Bearish Kicking pattern is characterized by two Marubuzo candlesticks.
The first is a White Marubuzo candlestick which opens and proceeds to rally, closing at the high of the day.
The second is a Black Marubuzo candlestick, which opens gapping lower than the previous day’s low and continues to decline, ultimately closing at the low of the day.
The Psychology of the Bearish Kicking Pattern
As with the Bullish Kicking Pattern, the Bearish Kicking Candlestick chart pattern is such a good indicator that the overall prior trend does not matter when a trader sees this formation on a chart.
The force of the selling pressure by the market gapping lower on the second day generally does not even need further confirmation to signal the initiation of trade.
Nevertheless, some more conservative forex traders might look to confirm the move by using trading volume figures on the second day.
The Bearish Kicking Pattern in a Trading Situation
A forex trader can take advantage of the Bearish Kicking pattern by simply going short when it appears. The Bearish Kicking pattern makes up one of the highest probability reversal patterns in Candlestick charting, and so will probably be one of any technical trader’s favorites.
Furthermore, taking advantage of the Bearish Kicking pattern would ideally involve waiting to short the market until the third day. Nevertheless, getting into the market to sell sooner rather than later could be the most advantageous since the strength in these types of bearish reversals can be considerable.
Finally, placing a stop at the top of the first candle for a Bearish Kicking Candlestick chart pattern would complete the trading strategy and provide a necessary element of trading risk management.