Kicker Pattern
What Is a Kicker Pattern?
A kicker pattern is a two-bar candlestick pattern that predicts a change toward an asset's price trend. This pattern is portrayed by a sharp reversal in price over the span of two candlesticks. Traders use it to figure out which group of market participants is in control of the bearing.
The pattern points to a strong change in investors' mentalities toward a security. The change in course for the most part happens following the release of significant data about a company, industry, or economy.
Understanding the Kicker Pattern
The stock market is portrayed by contending purchasers (bulls) and venders (bears). The steady back-and-forth among these players forms candlesticks patterns. Candlestick charting originated from a technique developed in Japan during the 1700s that followed the price of rice. Candlesticks are a suitable technique for trading any liquid financial asset like stocks, futures, and foreign exchange.
The kicker pattern is viewed as one of the most dependable reversal patterns and ordinarily shows a sensational change in a company's fundamentals. The kicker pattern is a reversal pattern, and it varies from a gap pattern, which will in general show a gap up or down and remain in that trend. The patterns seem to be comparable, however each infers something else.
Kicker patterns are either bullish or bearish. Bullish kickers start with a bearish candle and afterward show a bullish gap up. Bearish kickers start with a bullish candle and afterward show a bearish gap down.
How the Kicker Pattern Works
To traders noticing the kicker pattern, it might seem like the price has moved too quickly, and they might sit tight for a pullback. In any case, those traders might wind up wishing they had entered a position when they initially recognized the kicker pattern.
While the kicker pattern is one of the strongest bull or bear sentiment indicators, the pattern is rare. Most professional traders don't quickly blow up toward some path. In any case, if and when the kicker pattern introduces itself, money managers are quick to pay heed.
The kicker pattern is one of the most impressive signs that anyone could hope to find to technical analysts. Its significance is amplified when it happens in overbought or oversold markets. The two candles behind the pattern take on noticeable significance. The main candle opens and moves toward a current trend and the subsequent candle opens at a similar open of the previous day (a gap open) and afterward heads the other way of the prior day's candle.
The bodies of the candles are inverse varieties on many trading platforms, making a beautiful display of the emotional change in investor sentiment. Since the kicker pattern happens solely after a huge change in the investor demeanor; the indicator is frequently considered with different measures of market psychology or behavioral finance.
Illustration of a Bearish Kicker Candlestick Pattern
The Bearish Kicker Candlestick Chart pattern's dependability is high when it is framed at the uptrend or shaped in an overbought area.
On day 1**,** one candlestick proceeds an uptrend and is, in this way, bullish in nature. It has no significance all alone when shaped in an uptrend.
On day 2, a bearish candlestick arises. The candlestick opens at a similar price as the previous day (or a gap down) and afterward heads the other way of the Day 1 candle. For this pattern to be legitimate, the open price of the day 2 candlestick must be equivalent to the open price of the day 1 candlestick. Be that as it may, a gap down will additionally reinforce the pattern.
Highlights
- The pattern points to a strong change in investors' mentalities towards a security that normally follows the release of important data about a company, industry, or economy.
A kicker pattern is a type of candlestick pattern that predicts a change toward an asset's price trend. - This pattern is described by a sharp reversal in price over the span of two candlesticks.
- Traders use kicker patterns to figure out which group of market participants is in control of the course.
- Kicker patterns are either bullish or bearish.
