A three-candle pattern where one candle is sandwiched between two of the opposite color, with the two outer closes landing at nearly the same price. Two separate days stopping at the same level tells the market that firm support (or resistance) sits there. A reversal signal.
The Stick Sandwich is a three-candle reversal pattern in which one candle is sandwiched between two of the opposite color, and the two outer candles close at nearly the same price.
The bullish version (a bottom) forms inside a decline: a first bearish candle, then a second candle that rebounds bullishly, and a third bearish candle. The key is the third candle's close, which lands at almost exactly the same price as the first candle's close.
The two bearish candles (the bread) wrapping a single bullish candle (the filling) is what gives the pattern its name.
How to Read
OANDA:USDJPY
The heart of the pattern lies in a single fact: two separate days closed at the same price.
After the decline of the first candle, price rebounds in the middle, then the third candle slides back down and stops dead, right at the first candle's close. Two rejections at the same price tell the market that a firm layer of buying, a support line, is absorbing the selling at that level.
How to Read
OANDA:USDJPY
Members Only
Full access is reserved for members of the library.