A two-bar candlestick pattern known as a "kicker pattern" indicates a shift in the trend of an asset's price. The price reverses sharply over the course of two candlesticks in this pattern. It is employed by traders to ascertain which subset of market players controls the direction.
The trend indicates a significant shift in the perceptions of a security among investors. Usually, the shift in course happens when important information about a business, sector, or economy is made public.
KEY KNOWLEDGE
One kind of candlestick pattern that indicates a shift in the trend of an asset's price is called a kicker pattern.
The price reverses sharply over the course of two candlesticks in this pattern.
Traders identify which set of market players controls the direction by utilizing kicker patterns.
The pattern indicates a significant shift in investors' perceptions of a security, which usually happens when important details about a business, sector, or economy are made public.
Either bullish or bearish kicker patterns are present.
Kicker Candlestick patterns:
There are two types of kicker candlestick patterns – bullish and bearish.
Bull Kicker Candlestick Pattern:
The bullish kicker candlestick pattern develops during a bearish price move. I know that is counterintuitive, but remember the stock gaps in the opposite direction of the primary trend – hence bullish.
Observe that the gap's two candles are, respectively, bearish and bullish. The fact that the candles never overlap is an important detail to note. This is crucial for pattern validation.
Bearish Kicker Candlestick Pattern:
The pattern is the mirror of the bullish candlestick pattern and is a great indicator that the party is over.
The pattern is exactly the same as the bullish kicker, except reversed, as you have undoubtedly surmised. This time, the gap's two candles show bullish and bearish trends, respectively.
Kicking Pattern Candlestick vs Exhaustion Gap
An exhaustion gap is a gap that forms during periods of low trading activity and is oriented in the direction of the trend. For a short while, the trend may stay in the gap's direction before volume increases and price action turns around.
After that, volumes rapidly increase, the stock reverses course, and a fresh bullish trend is initiated.
How to Identify a Bullish Kicker Candlestick Pattern?
First, a bearish (red) candle opens the pattern.
The second candle opens above the closing of the previous day with a gap to the upside.
It concludes with a bullish candlestick and keeps going straight up.
The second candlestick's wick, which has a tiny or nonexistent bottom wick, shouldn't cover the gap.
Bullish & Bearish Kicker criteria
The opening for the first and second days is the same.
In contrast to the starting price, the price movement is in the other direction.
The trend is meaningless in a kicker scenario.
Usually, unexpected news that breaks before or after market hours forms the signal.
The price never goes back into the trading range of the prior day.
Freqeuently Asked Questions:
Being bullish means you are optimistic that prices will go higher from where they currently are while being bearish is the opposite; you think prices will trade lower from where they currently are. However, being bearish can be just as profitable.
Buying a call option is considered to be the most bullish options strategy. This strategy gives the buyer of the call option the right but not the obligation to buy a security at a specific price at a specific time. In this strategy, the buyer profits when the security increases in price.
The bullish kicking candlestick pattern is composed of two marubozu candlesticks: a black one as the first candle followed by a white one with an upward gap between. The candlestick acts as a bullish reversal both in theory and in reality, but only 53% of the time.
