The pattern is also a reversal pattern. The pattern has three candles. It forms at the top of an uptrend. The first candle is any long and candle. The second candle is a small and indecisive . The third candle is any long and candle.
During an uptrend, high optimism causes heavy buying. The first candle forms. It’s long and . The indecision between the buyers and sellers forms the second candle. It’s a small candlestick—or a . The expectation of negative stock news in the market forms the third candle. It’s long and . When the increases and the price decreases, it suggests a change in trend.
These patterns are used for trend identification. The pattern is used as a buy signal. The is used as a sell signal. It’s advisable to use a combination of patterns and indicators to determine your trading strategy.