For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Dumpling Top Pattern”.
Dumpling Top Pattern
– Normally it should be a signal of Bearish reversal of the current Trend.
– It occurs during an Uptrend; confirmation is required by the candles that follow the Pattern.
– The Pattern starts during an Uptrend, then it becomes a “Sideways” Trend (That represents the indecision of the Markets); at the end of the Pattern, there is a reversal in the direction of the Trend and it becomes a Downtrend.
– This Pattern is quite rare; is important that there is a Gap Down after the “Sideways” Trend and just before the start of the Downtrend (To obtain a further confirmation of the reversal of the Trend, as the Pattern suggests).
