Candlestick patterns are repeatable candles formations that help in identifying the best entry or exit points. Their appearance can predict the continuation or reversal of the existing trend. The pattern I am going to talk about today belongs to the reversal group of the candlestick patterns. It is known as the Stalled Candlestick pattern.
|→The Stalled Candlestick pattern is a reversal pattern that can help identify potential trend reversals.|
|→The pattern consists of three candles with decreasing body sizes in the same direction.|
|→For a bullish Stalled pattern, look for a smaller bearish candle followed by an even smaller bearish candle. For a bearish Stalled pattern, look for a smaller bullish candle followed by an even smaller bullish candle.|
Recognising the Stalled pattern on the Olymp Trade price chart
Three candles form the Stalled pattern. The first candle has the biggest body of all. The second is a bit shorter than the first one, and the third candle is even smaller. All three candles develop in an identical direction.
The Stalled candlestick pattern can be bullish or bearish though, you would most often find the latter.
A bullish Stalled pattern
The bullish Stalled pattern may be identified during the downtrend in the market. The first candle should be bearish with a quite big body. The second, also bearish candle should have a smaller body and the third bearish candle even smaller.
Decreasing the size of the candles represents losing control by the bears. You may expect a new uptrend will form. Enter when the bar breaks the high of the smallest candle of the pattern.
A bearish Stalled candlestick pattern
In the uptrend, you may search for the bearish Stalled candlestick pattern. The first candle in the pattern has a big real body and is green. The second candle should open and close higher than the previous one and also be bullish. The third bullish candle’s body is the shortest of all three, and the candle opens and closes higher than the previous two. Its opening should lie close to the closing of the former candle. Moreover, it has a long upper shadow.
The arrival of the bearish Stalled candlestick pattern informs that slowly the bears are gaining control over the market and the price will most probably change its direction.
When you spot the bearish Stalled pattern on the Olymp Trade chart, you may open a short position as soon as the price breaks the low of the smallest candle.
Pros and Cons of the Stalled Candlestick Pattern ⚖️
- Can provide early indications of potential trend reversals
- Easy to identify and interpret on price charts
- Can be used in conjunction with other technical analysis tools for confirmation
- Not 100% accurate and can produce false signals
- Requires proper identification and confirmation to be effective
- Should be used in combination with other technical analysis methods for better decision-making
|Bullish Stalled Pattern||Bearish Stalled Pattern|
|Identified during a downtrend||Identified during an uptrend|
|First candle is bearish with a big body||First candle is bullish with a big body|
|Second candle is bearish with a smaller body||Second candle is bullish with a smaller body|
|Third candle is bearish with the smallest body||Third candle is bullish with the smallest body|
The candlestick patterns are useful tools in technical analysis. You must naturally apply the candlestick chart type. Then, just observe the candles carefully and catch the development of the pattern.
The Stalled formation consists of three candles where each next candle has a shorter body than the previous one and all three are in the same colour. It most often appears during the uptrend however, you may also find the bullish Stalled pattern during the downtrend.
The appearance of the Stalled candlestick pattern provides information about upcoming trend reversal.
Confirm trading signals with an alternative method. It will minimise the risk you take and strengthen the chances of good decisions.
Make use of the Olymp Trade demo account. Check how good you are at noticing the Stalled candlestick formations without risking wiping out your account.
Wish you good trading results!
Frequently Asked Questions about the Stalled Candlestick Pattern 🧐
- Q: What is the Stalled Candlestick pattern?
- A: The Stalled Candlestick pattern is a reversal pattern that consists of three candles with decreasing body sizes in the same direction.
- Q: How can I identify a bullish Stalled Candlestick pattern?
- A: Look for a larger bearish candle followed by a smaller bearish candle and an even smaller bearish candle.
- Q: When should I use the Stalled Candlestick pattern?
- A: The Stalled Candlestick pattern can be used to identify potential trend reversals and determine entry or exit points in your trading strategy.
- Q: Are there any limitations to the Stalled Candlestick pattern?
- A: While the Stalled Candlestick pattern can provide valuable insights, it is not foolproof and should be used in conjunction with other technical analysis tools for confirmation.
- Q: Can the Stalled Candlestick pattern be used in different timeframes?
- A: Yes, the Stalled Candlestick pattern can be applied to various timeframes, but it’s important to consider the overall trend and market conditions for better accuracy.
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