Bearish Kicking

The bearish kicking acts as a bearish reversal both in theory and in the marketplace.

Bearish Kicking

Theoretical performance: Bearish reversal
Tested performance: Bearish reversal 54% of the time

The bearish kicking candlestick pattern is rare because it is composed of two marubozu candles, with a gap separating them. Unless the stock is thinly traded, you may find only a handful in your lifetime.

The bearish kicking candlestick pattern appears during an uptrend and it signals an upcoming bearish reversal of the current bullish trend in the market. It consists of two candlesticks. The first day’s candle is a white Marubozu and the second day’s candle is a black marubozu with a downward gap between them. The downtrend continues and prices finally close at the low of the trading session. The length of the candles is important as they define the extent of the reversal. The gap is important because larger gaps mean the more remarkable reversal.

Credit for YT video: NetPicks

Kkicker candlestick pattern also known as the kicking pattern which is a two candle bullish and bearish reversal pattern and really it's a strong sign of the reversal of whoever is in control of the instrument that you're currently trading

So we know the market's a constant battle between buyers and sellers right highers and lower prices the kicking pattern will show an obvious shift in the sentiment in the market, right it's going to clearly favor one side even it's only for the short term now. This pattern generally happens after when the news that affects the markets released.

Okay, so the market's closed news comes out upon opening we'll see the pattern and traders will adjust their positions they'll exit or even enter trades. Now, instead of always looking for the perfect pattern understanding the psychology of this pattern is probably more important. First let's define what a bearish kicker is.

Okay, basically it starts during an uptrend we'll see a large momentum style green candle now the momentum candle that's preferred okay but it's not a definite requirement. We just want to see a bullish candlestick in the direction of the overall trend.

The next candle will essentially gap lower it's red little to no lower shadow and that's bearish obviously now this is a daily stock chart of our risk to networks so what we're looking at is a gap down in price okay well price is in an uptrend. An important note is between those two candles there's no overlap of them. Okay, there's no attempt for that red candle to seek out a higher price point, now the red candle actually almost closed on the low of the day just a few cents off. So what's the psychology behind the bearish kicker, well any large move in price can shock a trader so if we look at a large green momentum-style candle we know that they're going to draw in more buyers and it's going to further drive the price up.

Because they fear missing out on that big run in price right fomo the fear missing out it's kind of the same thing with this pattern so i want you to imagine you're long in this example you're sitting on the sidelines and you're looking short so if you're long and then you see this kicking pattern steps in what are you going to do. Well, you're going to immediately see a loss of profits right so it's going to cause a lot of traders to exit so if you're on the sidelines you're looking to short it well this candlestick pattern is a strong sign of bearish intent right so just understand the thoughts that go through a trader's mind when this pattern happens.

So trading the bearish kicker so we understand it's a bearish sign and when traders don't see any price attempt higher they want to unload the positions that they're holding now. You'll want to use a lower time frame chart for an entry and depending on how price evolves, okay you could short the rally or trade a break of the range so in this instance we're using the daily chart to see the kicker at the open we're going to understand what that pattern means.

Ee're going to see the bias for the trading day and on a lower time frame we can use a price pattern such as a break of a trading range or a pullback but instead of just using the kicker as information we can also trade it this is a five minute stock chart and at the open we get the gap up in price so in this example we will see two possible ways you can trade it and it all depends on what price does at number one we could just sell a break of the low it's a viable approach and in this example price drove a buck 15 down to the lows from a break of number one but number two you'll see price trying to fill the gap just a little bit we get a higher high which means at one point that candle was actually green so once it turns red.

Traders could enter a position and what's called a momentum shift so once you sell your stop would just go above the high and entering there actually increased your profit potential to two dollars and nine cents and it only cost you a few cents in risk so you want to have a few techniques to trade the pattern that's important because we never know what shape price will form after that kicker becomes confirmed will we get a pullback will price pause to give us an entry. We never know until it happens what's the bullish kicking pattern, what's the exact opposite of the bearish one.

Our first candlestick will be red in the direction of a downtrend, the next candle will open above the red candlestick and be green. Okay this is a five minute stock chart of f5 network, so number one we're actually in a downtrend it's defined by a price structure lower highs lower lows, number two let's say on the trading day price closes red on the day. Okay, the last candlestick at number three the first five minutes of the open we go green the two candles are not touching our bullish kicking pattern is in force and just for information just look at both those red and green candlesticks there are absolutely no shadows present so how would you trade it well we're going to do the exact opposite is the bearish one.

So, keep in mind this is a five minute chart, okay you can even drop lower to find a price pattern as we talked about earlier. A simpler version is just to buy the break of the high the completion of the kicking pattern. Okay, they're not complicated plays but we have to ensure that we have a price point where we will exit if price does collapse so unlike some chart patterns the kicking pattern does not have a built-in guideline for targets like a measurement of the impulse leg or height of the price range. Now, there are two rules of thumb you can use for stops if they fit your risk protocols.

The first one is you can look to exit at a loss if the current price breaks 50 percent of the range of the previous candlestick, second one is just use the low of the entry candle or a low of the second candle in the kicker the profit targets i always say you know their personal preference and you just got to know what kind of trader you are if you're a scalper. You might exit at the first sign of red after trading a bullish kicker risk reward targets may come into play where you will exit at two or three times whatever your risk is trailing stops you could trail under each candlestick low in an uptrend or just use an average true range trailing stop.

So, the kicking pattern it's a powerful reversal pattern okay it shows an obvious change in market sentiment. You can trade the pattern in a few ways, you can use a daily chart where the kicking pattern gives you the bias on lower time frame setups you can use intraday time frames where you trade the kicking pattern as the setup the difference between the two is one is purely informational that's the daily chart the second one is the tradable setup as i always say nothing's guaranteed so ensure you have your risk protocols in place so the losing trades when they come they are unable to wipe out your account.