There are a lot of reversal indicators for technical analysis and candlestick pattern. Counterattack candlestick patterns is a popular trend reversal indicator traders use to place positional trades. This unique indicator is here to help you.
This indicator is also known as the counterattack lines candlestick patterns. It involves two candlesticks moving in opposite directions. This indicator is useful in identifying trend reversals. It can be used either during an uptrend, or during a decline. It is called a bullish counterattack signal when it occurs in a downtrend. The indicator is also known as a bearish contraattack pattern if it occurs in an uptrend.
It is much easier to understand the significance of the pattern when you can see it in action. Let's take a closer look. This is the bullish counterattack pattern.
This figure is worth a look. The bullish candle has a white colour, while the bearish candle has a black color. This shows that prices are in a downtrend. The bears hold a strong grip on the market, and they are constantly pushing prices down. This is evident in the first black-colored candle. The high selling pressure on the trend causes the white candle to form a gap down and continue falling until it reaches its lowest point. The bears give up and the bulls flood into the market, causing the price to rise significantly. The bulls' strong demand means that the session ends positive at the close of the previous day.
This candlestick chart shows that prices are in an upward trend. The bulls are a strong presence on the market and continue to drive the prices up. This is evident in the string of white-colored candles. The high demand for black candles is evident in the opening of the first candle. This opens with a "gap up" expecting that the price will rise. The bulls give up and the bears take over. The market is then flooded by sellers, which drives down the price. The session ends at the close of the previous day due to the intense selling pressure by the bears.
Identifying the pattern is one thing. It's a different matter to enter into a trade using the identified patterns. These are the key points to remember before you enter into a trade using the counterattack lines candlestick patterns.
First, be aware of a hard trend. You can choose to be bullish or bearish.
Once you have identified the trend, be on the lookout for candles that open with either a 'gap-up' or a 'gap-down'.
Observe how the candle moves. The candle should move in an opposite direction to the current trend.
Ensure that the candle moving in the opposite direction is at the same point as the previous day's closing.
- A counterattack lines candlestick can only be called a pattern if it meets all of the above conditions.
Once the pattern has been identified, it is best to wait for confirmation candles before entering into a trade. In the case of a bullish counterattack, it is best to wait for a confirmation candle before entering into trades. The bullish reversal will be deemed unsuccessful if it happens otherwise.
The candle that appears following the bearish counterattack candlestick patterns is also bearish. This candle confirms the trend reversal, and should be considered the point of entry.
The counterattack lines candlestick pattern can be very specific so it is recommended to combine it with other technical indicators prior to making a tradingchoice. You can reduce the chance of your trade turning unexpectedly.