Meeting Lines - Japenese Candlestick Reversal Pattern

Meeting Lines Definition

The meeting lines pattern can occur in either an uptrend or downtrend. Meeting lines are formed when opposite-colored candlesticks have the same closing price. The Japanese use two terms to describe this formation: (1) deaisen - lines that meet and (2) shusen - counteroffensive lines. The meeting line is similar to the piercing line, but does not hold as much signifigance, because the counter move is not as strong.

Bearish Meeting Lines

The bearish meeting line takes place in an uptrend and is a sign that a potential bearish reversal is in play. The first candlestick in the formation is green, which is in correlation with the present uptrend. The second candlestick opens at a new high and then closes at the same close of the previous day. Traders should wait for the low of the first candlestick in the pattern to be exceeded prior to taking a short position. Stops can conversely be placed above the high of the second candlestick.

Bearish Meeting Lines Charting Example

Bearish Meeting Lines

Bullish Meeting Lines

The bullish meeting line takes place in an downtrend and is a sign that a potential bullish reversal is in play. The first candlestick in the formation is red, which is in correlation with the present downtrend. The second candlestick opens at a new low and then closes at the same close of the previous day. Traders should wait for the high of the first candlestick in the pattern to be exceeded prior to taking a long position. Stops can conversely be placed below the low of the second candlestick.

Bullish Meeting Lines Charting Example

Bullish Meeting Lines