1) There must be a prior uptrend. 2) Price opens above previous day close/high and makes a high higher than previous day. 3) The Red candle closes below previous day open/low
Trading this pattern 1) Look for this pattern after a big upmove. 2) Upon confirmation, open a short position on 3rd candle. 3) Place a stoploss above the high of the big red candle.
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