Bitcoin 1Week Chart just got even more Bearish with a Three Outside Down candle pattern.
What is that?
A three outside down pattern consists of 3 candlesticks that form near resistance levels. It' best to find this pattern at the top of an uptrend and the Inside version at the bottom of a downtrend.
The 1st candle is bullish, the 2nd must be a bigger bearish candle that forms a bearish engulfing, and the 3rd candle forms a lower high. Typically, a 4th candle candle confirm and forms an ever more bearish reversal pattern.
CLICK HERE FOR PATTERN IMAGE
How to Trade Three Outside Down Patterns
1. Watch for a smaller bullish candlestick to form.
2. Identify 2nd bigger bearish engulfing candlestick.
3. Watch for 3rd & 4th candlesticks to form lower highs.
4. Take a short position once price breaks below the 3rd or 4th candlestick based on risk tolerance. 4th candle means less risk.
5. Place stop above the 4th candle or based on your own risk tolerance.
When trading candlestick patterns you aways want to use confluence of other indicators:
For this instance we have:
✅ Higher volume on 2 Red Candles than Green.
✅ RSI in falling Wedge
✅ Stochastic RSI cross down
In my opinion its only a matter of time before Bye 19.5k 👋👋👋
What is that?
A three outside down pattern consists of 3 candlesticks that form near resistance levels. It' best to find this pattern at the top of an uptrend and the Inside version at the bottom of a downtrend.
The 1st candle is bullish, the 2nd must be a bigger bearish candle that forms a bearish engulfing, and the 3rd candle forms a lower high. Typically, a 4th candle candle confirm and forms an ever more bearish reversal pattern.
CLICK HERE FOR PATTERN IMAGE
How to Trade Three Outside Down Patterns
1. Watch for a smaller bullish candlestick to form.
2. Identify 2nd bigger bearish engulfing candlestick.
3. Watch for 3rd & 4th candlesticks to form lower highs.
4. Take a short position once price breaks below the 3rd or 4th candlestick based on risk tolerance. 4th candle means less risk.
5. Place stop above the 4th candle or based on your own risk tolerance.
When trading candlestick patterns you aways want to use confluence of other indicators:
For this instance we have:
✅ Higher volume on 2 Red Candles than Green.
✅ RSI in falling Wedge
✅ Stochastic RSI cross down
In my opinion its only a matter of time before Bye 19.5k 👋👋👋