******** Candlestick Reversal Pattern Probability High ***********

Bearish Reversal Pattern
3 Outside Down is another name for a confirmed bearish engulfing candlestick pattern. This is a sign of trend reversal beginning and the lower the second candlestick opens the better. It is a good time to think about going "short" or cashing in on long positions.

 

Characteristics
After an upward trend three large red candlesticks appear showing strong selling sentiment.

 

Each green candlestick closes at a new low. The floor is falling and there is no support.

 

Each red candlestick opens within the body (or even better below half the body) of the previous candle.

Confirmation
In this case confirmation has already occurred. You may be late to the trade if you entered now but probability of downward trend continuation is on your side as no support point has help.

1. This is a definite end to an upward trend. If you are long you should already have gotten out because clearly the feelings of buyers have changed and sellers are now forceful and dominating.

 

2. Something very psychological has happened at this level. It is either a whole number with tremendous strength or has shown enormous resistance at that level to create such a strong change in sentiment.