The Thrusting candlestick pattern is a powerful 2-candle formation that signals a potential bearish trend continuation. Identifying this pattern correctly can help traders capitalize on short-term market sentiment and momentum changes 📣
Here are the key criteria for a valid Thrusting candlestick pattern:
📍Prior Trend
The pattern should emerge within an established downtrend spanning several candle periods. This could range from a few weeks on higher timeframes to over a month on daily charts.
📍First Red Candle
The market extends the preceding bearish momentum with a long red candle closing significantly below its open.
It is vital to assess the candle relative to recent price action rather than in isolation. There should be no evidence of buyers resurfacing, such as long lower wicks indicating intra-candle rejection of low prices.
📍Second Green Candle
The green candle gaps downward, opening within the real body of the previous red candle at least halfway down from its closing. This demonstrates a failure to extend the uptrend and continues the trend.
However, determined buying quickly absorbs the selling pressure, driving up the price toward the previous candle's close.
Look for a long green real body showing strong bullish momentum through the majority of the period. A short upper wick is acceptable but should not exceed 30% of the total candle range.
📍Additional Factors
The magnitude of the green candle's body should be more than 50% that of the red candle's body. The larger the engulfing, the more robust the signal.
Seek additional confirmation from supporting indicators to avoid false signals and reduce risk exposure.
Carefully adhering to the above guidelines will make detecting high probability Thrusting setups easier.
