When Candlestick charts are interpreted correctly by a skilled technical analyst, they can clearly indicate potential market reversals to a forex trader. This can give the trader a higher likelihood of initiating high probability directional trades in the forex market.
Candlestick chart patterns can be a single candlestick, or they can consist of multiple candles. The Bullish Kicking pattern is made up of two candlesticks and is a reversal pattern indicating future upside activity in the market with a high probability of success.
As with most candlestick patterns, the Bullish Kicking pattern also has a corresponding Bearish Kicking Pattern that indicates a reversal to the downside.
Bullish Kicking Pattern
The Bullish Kicking pattern is characterized by two Marubozu candlesticks.
The first of these is a black Marubozu candlestick, which opens and then proceeds to decline before ultimately closing at the low of the day.
The second is a White Marubozu candlestick, which opens by gapping higher than the previous day’s high and then continues to rally. This candlestick eventually closes at the high of the day.
The Psychology of the Bullish Kicking Pattern
The overall prior trend does not matter much when trading a Bullish Kicking pattern.
Basically, when the exchange rate for a currency pair gaps higher and then continues to rally to close at the high of the day, this indicates a strong bullish tendency.
Volume figures are typically used on the white day to gauge the strength of the reversal and to confirm the move.
Furthermore, the bullish Kicking Candlestick chart pattern is similar to the bullish Separating Lines pattern.
The Bullish Kicking Pattern in a Trading Situation
A forex trader can take advantage of the Bullish Kicking pattern by simply going long the forex market when it appears.
The Bullish Kicking pattern makes up one of the highest probability reversal patterns in Candlestick charting, and so will probably be one of any trader’s favorites.
Furthermore, taking advantage of the Bullish Kicking pattern would ideally involve waiting to go long until the third day. Nevertheless, getting into the market sooner rather than later could be the most advantageous since the strength in these types of bullish reversals can be considerable.
Finally, placing a stop at the bottom of the first candlestick for a Bullish Kicking candlestick chart pattern would complete the trading strategy and provide a necessary element of trading risk management.