Whale swallowing patterns and flat head patterns: teach you how to predict price reversals

The use of various candlesticks can reveal market sentiment and reflect changes in ownership between buyers and sellers. Therefore, candlesticks can provide information such as price action reversals or continuances.

cetacean morphology

The whale swallowing pattern is a strong reversal. There are two types of whale swallowing patterns, bull and bear, which are composed of two K-lines, a bullish K-line and a bearish K-line. There are three criteria for judging the whale swallowing pattern:

1. There must be a confirmed uptrend or downtrend, even if it is short-term. The market cannot be a consolidation (sideways price movement).

2. The first K-line entity must be smaller than the second K-line entity. The second K-line entity must swallow the first K-line entity. The second K-line entity does not necessarily have to swallow the actual shadow of the first K-line, although this phenomenon can reflect a stronger signal.

3. The second K-line entity must be the opposite of the first K-line entity, that is, if the first K-line is a bullish K-line, the second K-line must be a bearish K-line.

Please note that the most powerful whale swallowing pattern is when the entire K-line completely swallows the previous K-line from top to bottom, rather than just the entity, thus giving a strong signal that the market price is about to reverse.

Bull market whale swallowing pattern:

The following example shows how a bull market whale pattern signals a downtrend reversal, suggesting how buyers can overwhelm sellers.

number_1: The first K-line is the bearish K-line.

number_2: The second K-line is the bullish K-line, which swallows the entity of the previous bearish K-line.

Bear market whale swallowing pattern

The following example shows a bear market pattern that signals an uptrend reversal and shows how sellers can overwhelm buyers.

number_1: The first K-line is bullish K-line.

number_2: The second K-line is the bearish K-line, which swallows the entity of the previous bullish K-line.

Flat Top and Bottom Patterns

The flat head pattern is formed by combining two K-lines with a consistent highest or lowest point. Since the two hatches are of the same height, they look like a pair of pliers, and a few spreads are acceptable.

The market should be in a confirmed uptrend or downtrend to send a valid signal indicating a price reversal.

Flat top

In the following example, there are two K-lines at the end of an uptrend.

number_1: The first is bullish K line, the second is bearish K line. The length of the shadow line is the same, and the highest point is on the same horizontal line.

The shadow of the first K-line indicates that the seller has overwhelmed the buyer. The shadow of the second K-line indicates that the buyer is making a second attempt, continuing to raise the price, and then being overwhelmed by the seller again. After two unsuccessful attempts by the buyer to maintain the uptrend, the buying pressure decreases, and the seller successfully pushes the price lower.

Flat head bottom

The following example shows a flat head bottom pattern following a downtrend.

number_1: The length of the lower shadow is the same, and the lowest point is at the same price.

The shadow of the first K-line indicates that the buyer has overwhelmed the seller. The shadow of the second K-line indicates that the seller is making a second attempt, continuing to lower the price, and then being overwhelmed by the buyer again. After the seller's two unsuccessful attempts to maintain the downward trend, the selling pressure decreases, and the buyer successfully pushes the price higher.

variant

The entities or hatches do not need to be exactly the same size or even in a continuous order.

One of the most important aspects when looking for a flat head pattern is that the two shadows have the same high point. This means that the buyer or seller is finally overwhelmed, indicating a price reversal.

summary

1. Whale swallowing patterns suggest a price reversal, but not necessarily an immediate or significant reversal.

2. In the bull market whale swallowing pattern, the first K-line is the bearish K-line, and the second is the bullish K-line. The bullish K-line entity must swallow the bearish K-line entity.

3. In a bear market whale-swallowing pattern, the first K-line is a bullish K-line, and the second is a bearish K-line. A bearish K-line entity must swallow a bullish K-line entity.

4. The top of the flat head and the bottom of the flat head indicate a reverse shape.

5. In the flat top and flat bottom patterns, one K-line is a bullish K-line and the other is a bearish K-line. The shadow lengths of the two K-lines should be equal.