Tower Top and Tower Bottom are multi-day trend reversal candlestick patterns that traders use to identify potential reversals in the market.
What is Tower Top Candlestick pattern?
The Tower Top pattern occurs after an uptrend. On Day 1, there is a longer bullish candlestick, followed by a few smaller body candlesticks. Finally, on the last day, a large bearish candlestick appears, completing the formation of the tower. The left-most and right-most candlesticks make up the two sides of the tower, while the middle candlesticks act as the roof.
The psychology behind the Tower Top pattern is that the bullish candlestick on Day 1 confirms the previous uptrend. However, subsequent days of small body candlesticks indicate that momentum has slowed down. The large bearish candlestick on the last day suggests a change in sentiment, indicating a potential reversal.
To identify Tower Top patterns on your TradingView chart, follow these steps:
- Open your TradingView chart
- Make sure you are connected to your broker
- Look for a longer bullish candlestick followed by smaller body candlesticks and a large bearish candlestick on the final day
- Keep in mind that the left-most and right-most candlesticks should make up the two sides of the tower, and the middle candlesticks should act as the roof.
Why is Tower Top Candlestick pattern important ?
By learning to identify the Tower Top pattern and its psychology, traders can make informed decisions and potentially profit from market reversals.
Tower Bottom Pattern
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