Ladder Bottom - Bullish Candlestick Reversal Pattern
Ladder Bottom Definition
The ladder bottom pattern occurs at the end of downtrends and is a bullish reversal signal. The pattern consists of five candlesticks that is an early sign that the downtrend is deteriorating.
Ladder Bottom Charting Example
The first three days of the ladder bottom pattern are three long black (red) candlesticks. This part of the formation closely resembles the three black crows formation. The fourth day closes lower, but has a long upper shadow that eats into the body of the third candlestick. The fifth day of the ladder bottom is a long white (green) candlestick that opens above the body of the fourth day and closes strongly. The ladder bottom starts out like the concealing baby swallow and finishes with a strong up move. Traders should wait for the high of the fifth candle of the ladder bottom pattern to be exceeded prior to taking any long positions.