What is the Counterattack Candlestick Pattern

counterattack candlestick pattern

What Are Counterattack Lines?

On candlestick charts, the counterattack candlestick pattern is a two-candle reversal pattern. It can happen in either an uptrend or a decline. The first candle is a long black (down) candle. Second candle gaps down but then closes higher towards the closure of the first candle for a bullish reversal during a downtrend.

It shows that sellers have power. But that control may be slipping away as buyers have been able to bridge the gap.

The first candle is a long white (up) candle and the second candle gaps higher but then closes lower, towards the closing of the first candle, for a bearish reversal during an uptrend.

How Can you Interpret Counterattack Candlestick Patterns?

It’s much easier to understand the pattern’s meaning when you see it in motion. Example for bullish counterattack pattern.

Candlestick Patterns that Counter Attack

Take a look at the image below. The bullish candle has a white background, while the bearish candle has a black background. In this graph, the prices are definitely falling. The market is in the hands of the bears, who are constantly lowering prices.

The first black-colored candle exemplifies this point. In reaction to the trend’s considerable selling pressure the white candle forms a ‘gap down’ and continues to fall until it reaches the session’s lowest point.

The bears, on the other hand, lose steam at this moment, and the bulls rush the market, causing the price to skyrocket. The session concludes positively at about the previous day’s closing value, thanks to the bulls’ strong demand.

In this candlestick chart, the prices are rising. The bulls are a formidable force in the market, propelling prices higher all the time. This demonstrates by the white candle string. The first black candle opens with a ‘gap up,’ signaling that the price will continue to rise due to the high demand. The bulls, on the other hand, are losing momentum at this point, allowing bears to enter.

The sellers then flood the market, significantly lowering the price. Due to the bears aggressive selling, the session ends unfavorably at almost the same spot as the previous day’s closure.

An Example of a Counterattack Candlestick Pattern

When you see the pattern in action, it’s much easier to understand what it means. Let’s have a look at it. The bullish counterattack pattern depicted below. Take a look at this diagram for a bit. The bullish candle color is white, while the bearish candle color is black.

The prices are clearly on the decline in this graph. The bears have a firm grasp on the market and have been constantly driving prices lower. This demonstrate with the first black-colored candle.

The white candle produces a ‘gap down’ in response to the trend’s significant selling pressure and continues to decline until it reaches the session’s lowest point. The bears, on the other hand, have lost momentum at this point, and the bulls have flooded the market, dramatically raising the price. The session closes positively at about the point of the previous day’s closing, thanks to the bulls’ robust demand.

Candlestick Chart to Understand

The prices are on an upswing in this candlestick chart. The bulls are a powerful force in the market, continually driving prices higher. This is demonstrated by the white-colored candle string. Due to the tremendous demand the first black candle opens with a ‘gap up,’ implying that the price will continue to rise.

The bulls, on the other hand, are losing steam and giving way to the bears. The sellers then flood the market, causing the price to plummet. Session closes unfavorably at about the point of the previous day’s closing as a result of the bears’ heavy selling push.

Bullish Counterattack Pattern
Bullish Counterattack Pattern

What are Counterattack Candlestick Patterns and How Do I Use Them?

It’s one thing to recognize a pattern. Using the discovered pattern to enter a trade, on the other hand, is a different story. As a result, keep the following points in mind before entering a trade based on the counterattack lines candlestick pattern.

– First and foremost, look for a solid trend. Either a bullish or bearish trend is possible.

– Once you’ve established the trend, watch for a candle that begins with a ‘gap up’ or a ‘gap down.’ The apertures should be in line with current trends.

– Pay attention to the movement of this candle. The candle’s movement should be the polar opposite of the present trend.

– Once that condition is met, check to see if the middle candle is moving.

A pattern is called a counterattack lines candlestick if all of the previous conditions are met.

– It is recommended to wait for a confirmation candle before placing a trade once the pattern has been appropriately identified. In the event of a bullish counterattack pattern, for example, you should only consider trading if the candle that follows the pattern is equally bullish. The bullish reversal, on the other hand, is thought to have failed.

Have you ever noticed how a bearish candlestick pattern follows the bearish counterattack candlestick pattern? This candle confirms the reversal of the trend and should be used to join the market.

Bottom Line

In conclusion, Because the counterattack lines candlestick pattern is so unique and specialized, it’s best to combine it with other technical indicators before deciding on a trade. This reduces the chances of your deal taking an unexpected turn.

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