how the kicker pattern works
to traders observing the kicker pattern it may seem like the price has moved too quickly and they may wait for a pullback however those traders may find themselves wishing they had entered a position when they originally identified the kicker pattern while the kicker pattern is one of the strongest bull or bear sentiment indicators the pattern is rare most professional traders do not rapidly overreact in one direction or another however if and when the kicker pattern presents itself money managers are quick to take notice the kicker pattern is one of the most powerful signals available to technical analysts its relevance is magnified when it occurs in overbought or oversold markets the two candles behind the pattern take on visible significance the first candle opens and moves in the direction of a current trend and the second candle opens at the same open of the previous day a gap open and then heads in the opposite direction of the prior day s candle the bodies of the candles are opposite colors on many trading platforms creating a colorful display of the dramatic change in investor sentiment because the kicker pattern occurs only after a significant change in the investor attitude the indicator is often studied with other measures of market psychology or behavioral finance example of a bearish kicker candlestick patternthe bearish kicker candlestick chart pattern s reliability is high when it is formed at the uptrend or formed in an overbought area on day 1 one candlestick continues an uptrend and is therefore bullish in nature it has no significance on its own when formed in an uptrend on day 2 a bearish candlestick emerges the candlestick opens at the same price as the previous day or a gap down and then heads in the opposite direction of the day 1 candle for this pattern to be valid the second day s candle should open at or lower than the first day s candle traders commonly expect that a gap down before the second day s candle will increase the chances that prices will continue to fall after the second day is done 