Doji Star Candlestick Patterns: Identifying Bullish and Bearish Reversals

In technical charts analysis of the financial markets, there is a wide range of candle patterns. The bullish kicking pattern is a pattern indicating an upward trend reversal. The bullish kicker is a two candle pattern that starts with a large bearish candlestick lower (black or red) than a second large bullish candle that gaps higher in price. The bullish kicker can happen during a price range after a bearish candle or near the end of a downtrend in price. A bearish kicker can develop despite the trend direction and is a strong bearish signal. Candlestick patterns have become very popular since they first were introduced to the western world in the late ’80s.

Strong Bearish Candlestick Patterns

The last candle of the previous trading day and the first candle after the opening do not overlap. Conversely, if you identify a bearish kicker pattern, you should look to get short. To traders observing the kicker pattern, it may seem like the price has moved too quickly, and they may wait for a pullback. However, those traders may find themselves wishing they had entered a position when they originally identified the kicker pattern. This pattern signifies that buyers have overwhelmed sellers, potentially reversing the bearish trend into a bullish trend.

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The pattern’s bearish potential escalates when the engulfing candle closes near its low and has minimal wicks, demonstrating sustained selling pressure throughout the session. For enhanced confirmation, savvy traders look for bearish divergences on momentum oscillators or breakdown of short-term moving averages. Conservative entry approaches involve waiting for a subsequent bearish candle or a failed retest of the pattern’s high.

Kicker candle vs exhaustion gap

Traditionally used to see retracement levels such as the 0.618, a less-known (and slightly unconventional) tactic is to use this tool to give accurate target projections. To do this, open the Fib Retracement settings and remove all levels EXCEPT for 4.0 and 4.5, then save it as a default. On many charting platforms, this tool is represented by a ☰ symbol. Become our client, start bullish kicker candlestick pattern trading, and participate in the anniversary contest.

Similar Candlestick Patterns

Traders can use the Relative Strength Index (RSI) to look for confirmation of the Bullish Kicker Candlestick pattern when it appears. Relative Strength Index (RSI) is lower than the oversold level of 30 is interpreted as confirmation of a possible buying opportunity. RSI is at or above the level of 70  indicates that the market is considered to be overbought.

The first-day candlestick is a red marubozu followed by a gap into a bullish marubozu. There is no trend requirement for the kicking candlestick patterns, so we’ve fulfilled all the requirements for a valid pattern. As shown, a bearish kicker pattern starts with a white (bullish) candlestick which is then followed by a black (bearish) candlestick that opens below the white candlestick, creating a large downward gap. The upward trend needs to be validated by a bullish gap, a green candlestick, or a rise in prices the following trading day. Therefore, we sell Pandora stock and we place a stop loss above the pattern top as shown in the image. The candlestick opens at the same price as the previous day (or a gap down) and then heads in the opposite direction of the Day 1 candle.

Identifying the Bearish Doji Star Pattern

• This is interpreted by the trader as a strong signal of bullish sentiment, and he decides to open a long position in RIL.
• An upward trend reversal is possible in the future, although this pattern needs to be confirmed by other indicators.
• Patience is crucial – wait for complete pattern formation before taking action, as premature entries based on partial patterns frequently lead to losses.
• The bullish kicker can happen during a price range after a bearish candle or near the end of a downtrend in price.

The small bearish candles represent a controlled pullback before the trend resumes. The Piercing Pattern is essentially an early-stage Bullish Engulfing pattern. The wicks of a candle provide critical insights about rejected price levels.

A single-candle bullish reversal pattern with a small body at the bottom and a long upper wick, appearing during downtrends. Despite its shooting-star appearance, context makes it bullish as it indicates buying pressure starting to emerge. A single-candle bearish reversal pattern with a small body at the bottom and a long upper wick at least twice the body’s size.

On the lowest, we are witnessing a sharp rise in prices and a strong comeback of buyers. These candlesticks types will allow you to predict an upward reversal trend. The Bullish Kicker has a clear gap up between candlesticks, while the Bearish Kicker has a gap down, signaling the opposite trend direction. This Kicker-engulfing pattern reflects a sudden and decisive shift in control from sellers to buyers. If you’re interested in mastering some simple but effective swing trading strategies, check out Hit & Run Candlesticks. We look for stocks positioned to make an unusually large percentage move, using high percentage profit patterns as well as powerful Japanese Candlesticks.

This is crucial, because if it did, the Bullish Kicker would not exist because the wick would close the gap between the candles. Following the pattern, as expected, a reversal occurs and an uptrend begins. Although peppered with black candles, the upward price movement is strong, creating a steep escalation.

They provide traders with early signals of potential trend reversals, allowing for timely entry or exit decisions. A bearish engulfing pattern is a two-candle reversal pattern that typically occurs at the top of an uptrend. It forms when a smaller bullish candle is followed by a larger bearish candle that completely engulfs the previous candle’s body. When a bearish engulfing pattern occurs, it often signals a potential reversal from a bullish trend to a bearish trend. Combine these visual signals with technical confluence factors like support/resistance levels, trend lines, moving averages, and momentum indicators.

Even the most perfect reversal patterns occasionally fail, making proper risk management essential. The strongest setups often follow the principle of asymmetric returns—limited, well-defined risk against much larger potential rewards. Authentic reversals typically show increasing trading volume as market participants recognize the shift and reposition accordingly. A textbook engulfing pattern with below-average volume deserves skepticism, while the same pattern with surging volume demands attention.

• It’s pretty random, so don’t try to guess the direction of the breakout using just this candlestick pattern.
• Additionally, patterns often work better in liquid markets where price discovery is more efficient.
• Traders should always use multiple technical and fundamental indicators in conjunction with risk management strategies to maximize their chances of success.
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• If you know how to spot and understand it, you can improve your chances of making better trades.
• Japanese candlestick practitioners emphasize that the pattern requires a true gap down on the opening of the second day, creating a psychological shift that catches bearish traders off-guard.

Now that we’ve covered the bullish pattern, let’s dig into the bearish version of the pattern. As you probably know, the rising wedge pattern has strong bearish sentiment. One point to note is that we opened our position after a large candlestick. There isn’t necessarily anything wrong with this approach, but with such a large price expansion, odds are the stock will go lower before heading higher. The pattern symbolizes a strong change in the investor’s attitude about the stock. This usually happens due to the release of crucial information about the company.

That setup marked the bottom of the COVID crash for AAPL and the stock surged more than 60% over the following months. As with all candlestick patterns, the kicker pattern is not always reliable and there are times it will give you a false signal. In line with this, traders and investors use several approaches to improve the reliability of the pattern. Similarly, the bearish kicker happens in an uptrend, sending a signal that the asset will start a new bearish trend. In both, these kicker patterns are characterized by a gap that happens between candlesticks. A kicker pattern is a security’s price charting pattern that is identified by a drastic reversal in price over the span of its distinct two-bar candlestick formation.

Many professional traders actually look for these pattern failures as trading opportunities in themselves. The Bearish Runaway Gap is the downside equivalent, signaling potential continuation of downtrends. The Bull Flag is among the most reliable continuation patterns in any market. The Bearish Momentum Candle is the downside equivalent, signaling potential continuation of downtrends. The Bullish Momentum Candle is a powerful continuation signal during uptrends or at the end of consolidations.