Traders’ objective is to enter transactions at the best moment. This moment is not always so easy to identify and that is why various tools exist. Chart and candlestick patterns can help you in the decision-making process. We want to present them to you so you can utilise them in your trading. Today, we are going to describe the Sushi Roll pattern.
Key Takeaways🔑
| →The Sushi Roll pattern is a reversal pattern used to identify potential trend changes. |
| →It consists of 10 candles, with the first five showing minimal fluctuations and the next five engulfing the previous five. |
| →The Sushi Roll pattern can be bullish or bearish and provides early warning signals for potential reversals. |
Contents
Sushi in trading
The Sushi Roll belongs to reversal patterns. This means that once you notice it on the chart, you can expect the price will change its direction. It reveals the general market sentiment. The method was developed by Mark Fisher and it gives you a warning about a possible reversal pretty soon.
How does the Sushi Roll look like?
In order to identify the pattern we describe today, you need to take 10 candles under observation. The first five should not show any large fluctuations. And the next five candles should engulf the first five.
The Sushi Roll can be bullish or bearish. Let’s see it on the exemplary chart.
Above you see a bullish Sushi Roll pattern. It can be identified during the downtrend. First five candles in the pattern show rather a sideways movement. The next five candles completely engulf the previous five. Not all candles in the second half of the pattern have to be green.
The following chart shows a bearish Sushi Roll that should be searched for in the uptrend. Here the last five candles of the pattern include in their range all the lows and highs from the previous five candles.
Trading with the Sushi Roll pattern on Olymp Trade
With the use of the Sushi Roll pattern, traders are able to identify trend reversal quite early. You can use this pattern to either open or close your transactions.
If you plan to enter a long trade you should look for the bullish Sushi Roll pattern to appear. Wait until the candle closes above the highest high from the pattern and then open a long position. You can also try more aggressive entry without waiting for the candle to close.
In order to open a sell trade identify the bearish Sushi Roll pattern first and then wait for a candle to close below the lowest low in the pattern. You can also open a short position immediately after the price goes under the pattern low.
Pros and Cons of Trading with the Sushi Roll Pattern 🍣
Pros:
- Helps identify potential trend reversals
- Provides early warning signals for entry or exit points
- Can be used on various chart timeframes
Cons:
- Requires proper identification and confirmation of the pattern
- May produce false signals in certain market conditions
- Should be used in conjunction with other indicators for better accuracy
| Trading with the Sushi Roll Pattern | Tips for Success |
|---|---|
| Identify the Sushi Roll pattern by observing 10 candles on the chart | Ensure the first five candles show minimal fluctuations |
| Look for the next five candles to engulf the previous five | Confirm the pattern with other indicators or volume analysis |
| Open long positions when the candle closes above the highest high of the bullish Sushi Roll pattern | Open short positions when the candle closes below the lowest low of the bearish Sushi Roll pattern |
Summary
You will find the Sushi Roll among reversal patterns. It can be used on basically every chart timeframe. It reveals a change in the sentiment and the beginning of a new trend.
You can use the pattern to open or close an existing position. It can function as a standalone indicator, however, you can also use some extra confirmation of the signals in a form of the moving average or volumes.
The Sushi Roll is a pretty reliable pattern though not observed frequently. Go to the Olymp Trade demo account and try to find it. Practice trading with the Sushi Roll and once you are ready, move to the live Olymp Trade account to earn profits.
Good luck!
Frequently Asked Questions about the Sushi Roll Pattern 🧐
- Q: What is the Sushi Roll pattern?
- A: The Sushi Roll pattern is a reversal pattern used to identify potential trend changes.
- Q: How is the Sushi Roll pattern formed?
- A: The pattern consists of 10 candles, with the first five showing minimal fluctuations and the next five engulfing the previous five.
- Q: What does a bullish Sushi Roll pattern indicate?
- A: A bullish Sushi Roll pattern suggests a potential trend reversal from a downtrend to an uptrend.
- Q: How can I use the Sushi Roll pattern in my trading?
- A: You can use the pattern to open long positions when the candle closes above the highest high of the bullish pattern and open short positions when the candle closes below the lowest low of the bearish pattern.
- Q: Should I use additional indicators with the Sushi Roll pattern?
- A: It is recommended to confirm the pattern with other indicators or volume analysis for better accuracy.