There are different types of candlestick patterns. But when we talk about above the stomach evolves over a period of almost two sessions. In this pattern, the existing downtrend is there. And it appears at the bottom of any downtrend.
Brief Review about Above the Stomach Pattern
When it is the first day, the bears are under the control of the pattern. As a result, the downtrend confirmed through it. Now take the second day, on this day, the prices will open a bit higher above the midpoint of any previously filled candle. In addition, it will close above the above value. It clearly states the sentiments that have changed entirely. And it also indicates that further buying will also happen in the next session.
Example of Above Stomach pattern
The first thing that the traders must do in the above stomach pattern is to take the decision and start to look for the best buying opportunities. The traders must keep in mind that after fill candle the buy price must be around the hollow candle’s close price.
Then stop loss must consider. It includes the question of what if the direction of the market reverses after printing the above stomach pattern. Here if this case happens, the two candles will make the above stomach pattern at the lowest low will act as stop-loss.
How Above Stomach Pattern is Different from the below Stomach Pattern?
When we talk about the below stomach pattern, it is relatively different from the above stomach pattern as two sessions involve a period. It will require any existing uptrend and also appears at top of an uptrend.
Here on the first day of the pattern, there is a confirmed uptrend and bulls remain in control. On the Second Day, the prices become low, they are lowered at the previous hollow candle and below the mid-point. As a result, it shows the changes in the sentiments. It shows that in coming sessions, further selling will happen.
Main Points for Considering
The very important thing is to make sure about the selling opportunities. Make sure that the selling price, after the hollow candle must be around the close proof of any filled candle.
The many important points to consider are:
- There are chances of high probability setup when it appears at resistance or support
- If the patterns are with body works that are large, then they work best than the patterns that are having short bodies
Tidbits About Above the Stomach
You can get a lot of help through candlestick charts. But if you are not getting the main things about Above the stomach. Then you must consider the tips below. They will help you a lot.
- Above the stomach patterns occurs during a downtrend
- There is a confirmation required by candles
- The close is above the Close of the First Candle
- It is also above the midpoint of First Candle’s Real Body