Ladder Top - Bearish Candlestick Reversal Pattern

Ladder Top Definition

The ladder top pattern occurs at the end of uptrends and is a bearish reversal signal. The pattern consists of five candlesticks that is an early sign that the uptrend is deteriorating.

Ladder Top Charting Example

The first three days of the ladder top pattern are three long white (green) candlesticks. This part of the formation closely resembles the three white soldiers formation. The fourth day closes higher, but has a long lower shadow that eats into the body of the third candlestick. The fifth day of the ladder top is a long black (red) candlestick that opens below the body of the fourth day and closes poorly. The ladder top resembles the belt hold line and then finishes with a sharp sell off. Traders should wait for the low of the fifth candle of the ladder top pattern to be exceeded prior to taking any short positions.

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