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The kicker candlestick pattern is a strong reversal signal that highlights sharp market shifts. With dramatic price changes over two candlesticks, it shows clear moments when momentum shifts—upward or downward. Widely used by traders in stocks, forex, and commodities, this pattern is a key tool for spotting major trend changes.
In this guide, you’ll learn how to spot and leverage the kicker candlestick to find high-probability opportunities, especially in fast-moving markets. Let’s dive in.
What you’ll learn
Decoding the Kicker Pattern
Generally speaking, a kicker pattern is a type of candlestick chart pattern that shows a strong and usually quick change of market sentiment towards the breakaway pattern. It is characterized by two distinct candlesticks: the first candle is usually following the trend, and another candlestick will drop sharply in the opposite direction forming a reversal. The second candlestick starts a long way away from the first, with a clear gap and a different look to the price action.
Whether it goes long, or short, the kicker pattern can be bullish or bearish. A bullish kicker starts with a bearish candlestick which indicates selling pressure, and then the second candlestick opens at a big up gap upward and keeps going up, which is a reversal upward. The first candlestick is bullish because it has upward momentum, and the second candlestick is bearish as it opens and closes far lower in that there is a sharp downward reversal.
One of the defining traits of the kicker pattern is its abrupt and often surprising nature, which catches market participants off guard. Unlike gradual patterns like the bullish engulfing, the kicker’s sharp shifts are driven by sudden sentiment changes—or breaking news—that force traders to quickly reverse their positions. This pattern is particularly useful for traders, as it often precedes clear ‘buy’ or ‘sell’ signals, leading to significant market reversals and potential profit opportunities.
Mechanics Behind the Kicker Formation
When market sentiment changes suddenly, often after an unexpected bit of news or event, a kicker pattern forms. A candlestick in the current trend – bullish or bearish, respectively – is followed by a candle where it opens with a significant gap in the opposite direction.
The pattern is powerful because the gap signals a sharp market reversal. The second candlestick typically shows strong continuation in the new direction, reinforcing the reversal signal.
A strong reversal pattern, the bullish kicker signals a sharp shift to upward momentum.In this bullish kicker, the market is already in a downtrend, and the first candlestick is bearish, showing that selling pressure continues. However, the next day, the market opens well above the prior day’s high and rises considerably more over the course of the day, making a large bullish candlestick. This means that buyers have taken over, and previous bearishness was entirely discounted, foreshadowing the potential of further price runup.
On the flip side, a bearish kicker pattern shows up in an uptrend, with the first candlestick being bullish, suggesting buying pressure. In the next session, we see a big gap followed by a strong bearish candle that goes down throughout the day. This dramatic shift implies that seller activity now exceeds buyer activity, causing a steep reversal of direction and even worse to follow.
The success of the kicker pattern hinges on the size of the gap and the sustained momentum in the new direction, confirmed by high trading volume. Momentum indicators play a crucial role in evaluating the strength of this continuation. The stronger the signal was, the larger the gap and the more sustained the movement. This is interpreted to signal that traders are making a decisive change in market sentiment; to succeed or fail in a trend that can be followed by entering trades in response to the direction of that trend.
Identifying a Bullish Kicker on Charts
How do you identify a bullish kicker on a chart? Close observation is essential when the markets are in a downtrend or consolidation. You then look for a bearish candlestick that sticks with the current trend and shows selling pressure continuing. However, this initial candle often closes lower than it opens, signaling that sellers still manage the market.
The critical moment is when the next session opens much higher than the closing point of the previous bearish candlestick. This is the first significant bull kicker signal we see with this upward gap in price. The gap reflects a sudden shift in market sentiment, often triggered by breaking news or unexpected events that drive strong buying interest.
Once you see this gap form, you must focus on the second candlestick. The ideal thing about this candle is that it should continue to rise throughout a trading session and close to a high. The more upward the kicker pattern becomes, the more reliable it becomes, but the stronger and more consistent this upward movement is. All this speaks in favor of the pattern, as the absence of any lower shadows or pullbacks during the session confirms that buyers are pushing the market upwards with conviction.
Volume plays an important role in confirming the strength of a bullish kicker. More confirmation can come from more trading volume in the formation of the second candlestick, which would indicate a rise in the amount of buying as well.
When trading a bullish kicker successfully, traders can take their position after the second candlestick has already closed and be near the onset of the new uptrend. A stop loss order can be placed below the gap or just below the low of the first bearish candle to manage risk. This strategy can profit from a momentum shift in the market and remain protected from a reversal.
Contrasting Bullish and Bearish Kickers
While both structurally bear similarities, the bullish and bearish kicker patterns show contrary signals in the market. When a bullish kicker occurs, it’s a dramatic turn from going down or sideways to an uptrend; when a bearish kicker occurs, it’s a reversal from being bullish to a stunning drop. For traders interested in profiting from trend reversals, understanding how trends get formed and what the implications are is vital.
The bullish kicker begins with a bearish candlestick that reiterates selling pressure, hence if there’s a downtrend. The next session gap opens up significantly higher, and the price continues to run until the end of the session. Such a bearish to strong bullish occurrence indicates a complete reversal of market sentiment, which tends to indicate an upward change in trend.
A strong reversal signal, the bearish kicker pattern indicates a sharp shift to downward momentum
Meanwhile, a bearish kicker starts with a bullish candlestick walking in the footsteps of a bull move. The sudden shift happens when a fresh session opens with a large gap down, meaning buyers are no match for sellers. The closing at the second candlestick is near its candle’s low, continuing to fall, confirming the bearish momentum. When this pattern occurs, traders should assume market sentiment is decidedly harmful and further downside movement is likely.
The difference between the two patterns lies in the direction of the trend reversal: The bullish kickers indicate a rise up; the bearish kickers a fall down. These are powerful indicators that market reversals may be imminent, but because they imply the opposite of each other, they are tools that a trader may use to warn of and react to changes in the overall market trend. In both cases, the size of the gap and the strength of the second (or sometimes a third) candlestick determines its reliability with higher volume, generally indicating the momentum behind the reversal.
Real-World Application: Bearish Kicker in Action
One noteworthy example is the one witnessed with Facebook (META) in July 2018. The company had been rising steadily, being a showcase of investor confidence. But Facebook released a second (usually quarterly) report on earnings on July 25, 2018, showing slower revenue growth than anticipated and fewer user interactions. It triggered a decisive shift in market sentiment and unexpected news.
Look at how extreme this was:
Meta Platforms stock showing a bearish kicker pattern in July 2018 after an unexpected earnings report.
On July 26, 2018, following disappointing earnings, Meta Platforms’ stock gapped down significantly, erasing over $119 billion in market capitalization. This bearish kicker pattern marked a sharp reversal from the bullish uptrend to a strong bearish push. In the days that followed, the stock continued to decline, contributing to a broader market sell-off.
Those who spotted the bearish kicker pattern were able to move fast. Some sold off positions to reduce heavy losses, while others went short in the hope of profiting from a near-instant downturn. In this case, the bearish kicker showed great early warning of where the decline was coming from and can be used as a reliable method to anticipate large market moves and trade accordingly.
Evaluating the Strengths of the Kicker Pattern
The kicker candlestick’s strength lies in its clear signal of a market reversal. While the initial signal is strong, confirmation with volume or other indicators improves reliability, making it ideal for traders reacting quickly to market shifts.
The simplicity of the kicker pattern is another advantage for us. Its distinctive two-candle formation, which opens the second candle at a price level much higher (or lower) than the first, makes it easy to pick out on a chart, even for traders without much experience. This strong, immediate difference (divergence) in market sentiment between the two candles prevents false signals that are likely ordinarily possible because of the delay between the two candles. This is important for traders who use visual cues for technical analysis and immediately make decisions.
The kicker pattern is also useful for its predictive power. Its formation usually occurs when there is a lot of upward or downward movement in price, which signifies a change in the trend. This predictive quality gives traders knowledge of when some enormous market movement will occur, allowing them to position themselves to profit from a new trend or exit their positions if losses are imminent.
All in all, it’s a reliable, easy-to-recognize, and, most importantly, very powerful predictor of major trend reversals.
Challenges and Limitations of the Kicker Pattern
Although the kicker pattern is known to predict upcoming market reversals accurately, it has its challenges and drawbacks. Misidentifying the pattern in real-time market conditions is a common pitfall.
With only two candlesticks that make up the kicker, sometimes the formation will occur at a rate in which traders will misinterpret another surrounding price movement as part of the formation, resulting in a hasty decision. When you have frequent signals or trade signals that are poorly timed, they do not necessarily represent the natural direction of the market.
The second problem with the kicker pattern is that its reliability increases with confirmation from stock volume and other technical indicators. While patterns indicate the flow of a particular price action segment, observing them in isolation without cross-checking them with other market data like volume spikes or support resistance levels can misguide the trader. Without this added context, you can’t really tell if the kicker pattern is a long-term trend reversal or a temporary price spike.
To summarize, the mechanic of the kicker pattern is very powerful and can easily identify trends, however misinterpretation, lack of confirmation and market volatility can diminish its effectiveness. But traders who use this pattern need to be careful to confirm it with other analysis to make sure they don’t fall into either of these common traps.
Strategic Integration: Complementary Tools for Kicker Patterns
This is where integrating other tools and indicators that complement the kicker pattern is essential, as they can confirm the signal and help you reduce the chances of false moves. Volume analysis is one of the widely used tools with kicker patterns.
The formation of the kicker pattern comprises a massive increase in trading volume. Therefore, the strength of the price reversal is reinforced. If a kicker pattern develops with low or average volume, it is less than convincing and may carry less weight as a signal.
The relative strength index (RSI) is another helpful indicator for kicker patterns since it tells us if an asset has been overbought or oversold before we see the kicker pattern. A kicker pattern lining up with an oversold or overbought RSI reading is an extra tell that you have a solid chance of a strong reversal that you might not have had otherwise. For example, the kicker pattern is bullish; the RSI is below 30, which means that the market is oversold and ready to rise, which makes traders more confident.
However, moving averages, such as the 50- and 200-day moving average are also sufficient. Average these, and they show long-term trend direction, and when a kicker pattern forms near these levels, it can serve to confirm a trend change. For example, a bearish kicker formed on the 200-day moving average can indicate that the market is ready to reverse. Since moving averages often serve as perfect stop and profit-taking levels, kicker patterns that align with such moving averages offer strong entry or exit points.
Include volume, RSI, stock signals, and moving averages to increase the dependability of the kicker pattern. This risk management system’s integrated approach, with stock signals as a supplementary tool, not only assists in controlling risk but also enhances the accuracy of trend reversal predictions, offering a complete strategy to identify market opportunities.
Conclusion
The kicker candlestick pattern is one of the most reliable tools in technical analysis, offering an early warning of potential market reversals. Its sudden and often extreme change of market sentiment makes it a very reliable pattern, whether bullish or bearish, for calling out significant price turning points. If you are a trader who knows what to look for and what to interpret, you can trade on it for precise entry and exit.
While the kicker pattern is a powerful signal, combining it with complementary indicators such as volume, RSI, and moving averages significantly enhances its reliability. This confirms the pattern’s validity and empowers traders’ ability to make more educated decisions. That said, all bells and whistles notwithstanding, any technical tool requires one to factor in its conditions of trade and put on the correct risk management to generate the best outcome.
In the end, the kicker pattern turns out to be a rock-solid tool for traders seeking to participate in fast-moving market trends. Because of its reliability, it can be a critical piece of a well-rounded trading strategy when utilized in combination with other analysis techniques.
Decoding Kicker Pattern: FAQs
How Reliable Is the Kicker Pattern Compared to Other Candlestick Patterns?
The kicker pattern is strong in anticipation and a clear indication of a market sentiment shift. Unlike other patterns, such as the spinning top, which signals indecision in the market, the kicker pattern provides decisive clues to future price movement and is especially good for identifying reversal trends. However, complementary indicators improve its reliability.
Can Kicker Patterns Be Applied Across Different Time Frames?
Yes, kicker patterns do work on various time frames, from short intraday charts commonly used in day trading to longer time frames, such as weekly or even monthly charts. To understand the pattern, traders need to look at the context and the timeframe. Like many indicators, it works well both in short and long time frames, but it has the greatest impact in higher time frames.
What Risk Management Techniques Should Be Considered When Trading Kicker Patterns?
Trading kicker patterns are all about risk management. Placing stop loss orders just below (for bullish) or just above (for bearish) the kicker candle can protect us from surprise reversals. Trailing stops are used to lock in profits and managing position size based on risk tolerance all help in minimizing the risks. The pattern can be confirmed by pairing with volume analysis or another indicator.
Are Kicker Patterns Suitable for Both Day Trading and Long-Term Investment Strategies?
Yes, kicker patterns do work for both day trading and long-term investing. They work as a quick signal for intraday reversal for day traders. Longer-term investors can use kicker patterns in higher time frames (day, week, month) to indicate a market change from which to base investment decisions.
How Does Market Volatility Impact the Effectiveness of Kicker Patterns?
Kicker pattern effectiveness is affected by market volatility. In highly volatile conditions, they are prone to false signals and quick reversals. Kicker patterns work best in stable markets where they act as reliable trend reversal indicators. Combining them with volume and volatility measures to filter false signals during volatile markets shows that the weekly price fulfilled its role as a leading indicator to the extent possible given the circumstances.
