The stick sandwich candlestick pattern looks somewhat like an ice cream sandwich. It consists of two black (or red) candles with a white (or green) candle in between. The closing prices of the two black (or red) candles are equal. This demonstrates an obvious support price and the probability of a reversal in the trend is high.
Criteria for Stick Sandwich Candlestick Pattern
- A downtrend is concluded with a large black (or red) candle followed by a white (or green) candle. The white (or green) candle opens above the black (or red) candle’s close, and it closes above the black (or red) candle’s open.
- The final day completely engulfs the white (or green) candle and closes at the same level as the previous black (or red) candle.
Pattern Psychology Behind the Stick Sandwich
The Bears are in control for a while. At the end of the downtrend, the last black (or red) candle is followed by a large white (or green) candle. The white (or green) candle opens higher than the close of the last black (or red) candle. It trades up for the rest of the day and closes above where the previous day opened. This action makes it clear to the Bears that the downtrend may be coming to an end. The following day opens higher but trades down for the rest of the day. It cannot close lower than the previous close of two days prior, which are low. The shorts take notice and start to cover any buying strength over the next couple of days.
Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.
Continue to learn about more candlestick patterns to see how it can greatly improve your profits! Primary candlestick patterns should be understood first (such as the doji and hanging man patterns). Once you have a basic understanding of the primary signals, move onto the secondary candlestick signals and then eventually the continuation pattern such as this upside tasuki gap pattern.
The average investor does not have to be dependent on the investment professional when utilizing candlestick patterns. Professional recommendations are not always in your best interest at the forefront. Whether totally unfamiliar with investment concepts or very sophisticated in investment experience, the Japanese Candlestick trading formations are easily utilized. The signals and patterns are easy to see and their interpretations are reliable.
Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.