REVERSAL BAR PATTERN

REVERSAL BAR PATTERN

What does it look like?

A bullish reversal bar pattern goes below the low of the previous bar before closing higher.

A bearish reversal bar pattern goes above the high of the last bar before closing lower.

What does it mean?

For the bullish pattern, the market found support below the low of the previous bar. Not only that, the support was strong enough to push the bar to close higher than the previous bar. This is the first sign of a possible bullish reversal.

For the bearish pattern, the market met resistance above the high of the previous bar. Furthermore, the resistance was powerful enough to cause the current bar to close lower.

How do we trade it?

1. Buy above the bullish reversal bar in an uptrend
2. Sell below the bearish reversal bar in a downtrend