Rickshaw Man

What Is Rickshaw Man?

The rickshaw man is a type of long-legged doji candlestick where the body can be found at or exceptionally close to the middle of the candle.

Understanding Rickshaw Man

A candlestick shows the high, low, open, and close prices. The rickshaw man candle's open and close are at or exceptionally close to a similar price level, making the doji. The high and low are far apart, making long shadows on the candlestick. This shows hesitation with respect to participants in a market.

The rickshaw man candle happens when the two bulls and bears control a security's price at various times during a similar period. This disparity makes a wide trading range for the period, subsequently creating long shadows on the candle. In spite of the critical volatility indicated by the rickshaw man, it doesn't point to clear directional movement, and the price closes extremely close to its opening price.

The elements indicated by the rickshaw man propose uncertainty in the market, however it could convey a message to traders in light of setting. At times, the pattern might address a period of consolidation, which could recommend the continuation of previous trends. In different cases, the pattern could demonstrate uncertainty toward the finish of a bullish run-up, which could propose a market reversal. Traders with enough setting might need to wager on a continuation or reversal, yet much of the time, traders might need to hold off on taking any situations until a clearer chart pattern or price trend arises.

The rickshaw man, similar to all long-legged doji, demonstrates that the powers of supply and demand are approaching equilibrium. While the pattern can be utilized to address a security's movement throughout any amount of time, longer-term charts with additional participants adding to its formation are by and large more huge.

At the point when analysts utilize the rickshaw man with other technical indicators they are bound to get on dependable trading signals. For instance, on the off chance that the price is in an overall uptrend yet has encountered a recent pullback, a rickshaw man combined with an oversold stochastic making a bullish crossover could signal a base to the pullback is close — when the price starts moving up the pattern and indicator signals are confirmed.

The shooting star has an alternate setting and formation than the rickshaw man. A shooting star happens after a price advance. The shooting star has a long upper shadow, yet the open and close happen close to the low of the candle. The shooting start shows an expected finish to the uptrend.

Rickshaw Man Example

The daily chart of ROKU Inc. (ROKU) shows three instances of the rickshaw man candlestick. The first, on the right, happens as the price starts to rise following a decline. The rickshaw man candlestick signaled uncertainty and the price kept on moving sideways for two additional meetings before moving to the upside.

The next two models additionally show hesitation, and the price keeps on moving sideways following the rickshaw candlestick.

A trader could buy once the price moves over the rickshaw man high and set a stop loss below the rickshaw low. Essentially, a trader could short or sell once the price moves below the rickshaw low, and place a stop loss (if going short) over the rickshaw man high. This is definitely not a highly solid strategy, however, and utilizing different forms of technical analysis is highly urged if endeavoring to utilize this candlestick pattern for trade entry purposes.

Rickshaw Man Limitations

A rickshaw man candlestick signals hesitation. Different forms of technical analysis are commonly required to demonstrate whether this is great, awful, or unimportant. On the off chance that a trade is taken in light of the rickshaw man candlestick, there is no inherent profit target. It depends on the trader to likewise figure out where they will take profit on the off chance that the entry demonstrates profitable.

The pattern happens oftentimes, particularly when the price action is choppy. In this manner, traders must search for the pattern just in specific settings that improve the pattern's dependability, assuming they opt to utilize it.

Highlights

• The rickshaw man has long upper and lower shadows, with a small real body close to the center of the candle.
• The rickshaw man signals uncertainty in the marketplace.
• The rickshaw man ought to be utilized related to other technical indicators, price action analysis, or chart patterns to signal a potential trend change or continuation.