Good Trading requires the Best Charting Tool!- The Ladder Top candlestick pattern is a 5-bar bearish reversal pattern that appears at the end of a bullish trend.
- You can identify it with the following characteristics:
- The first three candles are always white with long real bodies opening and closing above the open and close levels of the previous candle.
- The fourth candle must have a white short body with a long lower wick.
- The fifth candle must be a long black candle opening below the real body of the fourth candle.
Statistics to prove if the Ladder pattern really works
Are the odds of the Ladder Bottom pattern in your favor?
How does the Ladder Bottom behave with a 2:1 target R/R ratio?
From our research the Ladder Bottom pattern confirms 72.8% of the time on average overall all the 4120 markets we analysed. Historically, this patterns confirmed within 3 candles or got invalidated within 6 candles. If confirmed, it reached the 2:1 R/R target 38.2% of the time and it retested it's entry price level 96.3% of the time.
Not accounting for fees, it has an expected outcome of 0.147 $/$.
It means for every $100 you risk on a trade with the Ladder Bottom pattern you make $14.7 on average.
Want to account for your trading fees? Have the detailled stats for your favorite markets / timeframes? Or get the stats for another R/R than 2:1?
🚀 Join us now and get fine-tuned stats you care about!
How to handle risk with the Ladder Bottom pattern?
We analysed 4120 markets for the last 59 years and we found 3 750 occurrences of the Ladder Bottom pattern.
On average markets printed 1 Ladder Bottom pattern every 4 161 candles.
For 2:1 R/R trades, the longest winning streak observed was 9 and the longest losing streak was 14. A trading strategy relying solely on this pattern is not advised. Anyway, make sure to use proper risk management.
Keep in mind all these informations are for educational purposes only and are NOT financial advice.
If you want to learn more and deep dive into candlestick patterns performance statistics, I strongly recommend you follow the best available course about it. Joe Marwood (who's a famous trader with more than 45 000 Twitter followers) created an online course called "Candlestick Analysis For Professional Traders" in his Marwood Research University. There he will take you through the extensive backtesting of the 26 main candlestick patterns. He then summarizes which one is THE best pattern. Do you know which one it is?
Remember, don't trade if you don't know your stats. Click here to signup to the course now!
What is the Ladder Top candlestick pattern?
The ladder top candlestick pattern is a bearish reversal pattern that appears at the end of a bullish trend. It is one of the most popular reversal patterns that give early signs of the uptrend’s deterioration. The ladder top has five candles just like its counterpart ladder bottom. However, its first three candles are white with long bodies. The first three candles resemble the three white soldiers formation. The fourth candle is also white but it has a shorter body than the previous three candles and with a long lower wick. The fifth candle is black with a long body that closes on its low. The longer the candlesticks of the ladder top, the more it will be reliable.
How to identify the ladder top candlestick pattern?
The appearance of the ladder top candlestick pattern is a very rare phenomenon that occurs very seldom. As we already know that it is a bearish reversal pattern, therefore, the prevailing trend must be an uptrend or bullish. There are certain other hints that can be used to identify the ladder top pattern.
- The first three candles are always white with long real bodies opening and closing above the open and close levels of the previous candle.
- The fourth candle must have a white short body with a long lower wick.
- The fifth candle must be a long black candle opening below the real body of the fourth candle.
What does the pattern tell traders?
The ladder top candlestick pattern is a bearish reversal pattern that appears during an uptrend and signals an upcoming reversal of the market. It is always very interesting for the traders to analyze the behavior of the market and candlestick patterns are very friendly in this matter. They allow traders to get an overall picture of the current market conditions and to predict the future.
The ladder bottom pattern does the same. It indicates that currently, traders have a positive outlook because of the bullish trend in the market. They continue to buy and keep the momentum going. The first three candles of the ladder top form in such circumstances. However, the appearance of the fifth candles indicates that the bullish sentiment has started to fade. Buyers still continue to buy in response to the new selling wave and keep the market close higher for the fourth candle as well. The fifth candle is the last whistle that predicts an upcoming bearish reversal.
The ladder top pattern also helps to devise some trading strategies as well. Traders can go short when the volume of each of the first four candles is lower than the volume of the previous bar. They can exit the trade after the appearance of all five bars. Moreover, the appearance of the fifth bar also signals to sell. It’s because it ends with an uptrend and starts a bearish trend that is likely to continue. Furthermore, technical analysts and experts always advise not using the ladder top pattern also. It should be used in conjunction with other indicators and patterns for solid confirmation of a bearish reversal.
How does Ladder pattern look in real life?
Looking to learn more about this pattern?
You should take a look at Joe Marwood's online course. In his course, he backtested the 26 main candlestick patterns before to summarize which one is THE best pattern. I really liked his course and you shouldn't miss it!
Click here to signup to his "Candlestick Analysis For Professional Traders" course now!
We loved Marwood Research’s course “Candlestick Analysis For Professional Traders“. Do you want to follow a great video course and deep dive into 26 candlestick patterns (and compare their success rates)? Then make sure to check this course!