Ladder Bottom

The ladder bottom is a candlestick pattern that usually appears at the end of a downward market. This pattern consists of 5 days.

The first three days the stock just gradually heads down. Each day the stock opens lower than the last and each day the stock goes down lower. The fourth day the stock goes lower but leaves a large shadow on the top of the pattern.

The fifth and final day the stock shoots up. This gives off the bullish signal.

Why is the ladder bottom bullish? When the upper shadow appears during the fourth day it signals the bears are weak. When the stock gaps up on the fifth day it shows buying pressure has token charge.

Combining this pattern with other indicators such as support and resistance or oscillators can help to make this a stronger buy signal.

Other Patterns

Candlestick patterns can be powerful ways of determining the trend of a given stock. Here are a few patterns to look into.

Hammer Pattern - A reversal signal after a large downtrend

Harami - A mini evening star pattern

Bullish Belt hold - a 1 day reversal signal