Since candlesticks are the basic building block of most technical analysis, the ability to read the patterns they make is a valuable trading skill. Here, we’ll go over everything you need to know to make money with kicking candlestick patterns.
First though, let’s start with a definition.
What Is a Kicking Candlestick Pattern?
A kicking (or “kicker”) pattern is a 2-candlestick formation that may signal a reversal. It consists of a marubozu candle moving with the current trend followed by a marubozu candle moving against the trend that is preceded by a gap on the opening side of the previous candle.
The kicking pattern has both bearish and bullish versions, known respectively as the kicking down and kicking up patterns. It is also similar to the separating lines. The range between each open creates a make-or-break price band that could shape upcoming price action.
Of course, candlestick patterns do not guarantee specific outcomes. Instead, they offer clues as to what is going on in the market.
So the question is, what do kickings really tell you?
What Kicking Patterns Mean
Unlike some patterns, English speakers do not use the Japanese name for this one.
In fact, it’s hard to determine where the terms “kicking” and “kicker” come from (or how they relate to the pattern). It’s an easy name to remember but it doesn’t provide any insight into how the pattern works.
In trading terms:
- During the first period, price drove strongly in the direction of trend and closed at its price extreme (high/low).
- Before the second period began, price drove strongly in the opposite direction of the trend.
- During the second period, price drove strongly in the opposite direction of the trend and closed at its price extreme (high/low).
This sets the stage for reversal, as it appears momentum has switched rapidly.
How To Recognize Kicker Candlestick Patterns
Traders are attracted to patterns partly because they stand out.
However, it’s easy to see things on the charts that aren’t truly there (or anticipate events that never come to fruition). That’s the main reason you should wait for all candles to close before making decisions based on candlestick patterns.
In theory, a kicking pattern must:
- Begin with a marubozu candle moving with pre-existing trend.
- End with a marubozu candle that 1) opens with a gap on the side of the first candle’s open and 2) moves against trend.
In practicality, many traders will make some exceptions.
- Neither candle necessarily has to be a marubozu, as long as they are both long candles (ie. belt hold) and their wicks do not overlap.
- The second candle doesn’t necessarily have to open with a gap, as long as it opens even with the first candle’s open (especially in markets where gaps are less common, like cryptocurrency).
Depending on who you ask, any of these standards may be more or less important. Technically, it would be more accurate to classify some of these variants as a different candlestick reversal pattern, such as the separating lines.
This is okay, as the implication means more than the classification. And similar patterns tend to have similar implications.
That’s not to say that these standards are altogether inconsequential (as we’ll elaborate on soon). You should definitely consider some non-negotiable, like the direction of the candles in relation to trend. Just keep in mind that context trumps criteria.
Ultimately, it’s up to you to decide how seriously to take each guideline.
After all, the goal of candlestick pattern analysis is to interpret underlying price action (not just label patterns correctly).
To this end, you need to understand where they fit.
Where Kickers Fit in the Chart Narrative
The markets are often characterized as a battle between the bulls and the bears.
Kicking patterns show that those trading with trend pressed their advantage on candle one, lost the momentum between candles one and two, then surrendered completely by the end of candle two.
On the chart, it looks like a rapid change of fortunes.
The first day saw a powerful trending move, which extended the ongoing trend. Once the market closed, game-changing fundamental news about the asset came out. This led to a dramatic turnaround overnight, resulting in an inside-open-turned-opposite-direction-gap. Once trading resumed on the second day, price continued to surge against the trend, ultimately closing at its most extreme counter-trend price.
Over the coming days, the gap is likely to become a crucial decision zone. If those looking for reversal can defend this price band, they have a better chance at making the trend change stick.
(This is only a hypothetical illustration, as a kicking pattern could represent a number of real-world scenarios.)
In the short-term, it amounts to a roundhouse kick from counter-trend traders.
The question traders need to ask themselves is,
“Is the reversal a certainty or is there more to come in this fight?”
To answer that question, you’ll need more than just an understanding of Japanese candlesticks and candlestick patterns. You’ll want to evaluate both within the context of longer-term chart patterns as well as trend and price levels. You’ll also want to make use of your own chart markup and indicators.
Explore the history of your preferred asset(s) with respect to kicking patterns and apply your findings to your own trading style.
Now, you can test (and/or stretch) the criteria we mentioned earlier to identify the best trade setups. For instance, you may find that kickers with wider gaps perform more reliably than those with smaller gaps. Or, you may find something else entirely.
This is the kind of technical analysis that brings the story in the charts into full focus.
How To Trade Kicking Patterns
Reversal points are great places to enter or exit trades, especially when you catch them early enough.
Kicking candlestick patterns serve as easy-to-spot signs of potential reversal and may even lead to cycle-defining tops or bottoms. Generally, you can assign greater weight to multi-stick patterns than single candles because they give you more information over a longer duration.
However, there are a few things you should know about trading candlestick patterns.
First and foremost, hit rates for most of them hover around 50%. According to Bulkowski’s Encyclopedia of Candlestick Patterns, kicking ups have a 53% hit rate while kicking downs have a 54% hit rate. This is little better than a coin flip.
In addition, candlestick patterns do not have standardized price targets or measured moves like chart patterns do. This can make it difficult to decide when to get out of your trade or how to manage your stop loss.
Moreover, failed reversal patterns often lead to continuation or consolidation. Therefore, you need additional points of confirmation to increase your odds of success.
Some such factors include:
- Volume – Reversals are often accompanied by elevated trading volume. For kicking patterns, you want to see a spike on the second candle (or just after).
- Price Formations – Reversal patterns that form on the right side of important price levels or trend lines are often more reliable. Always be aware of support and resistance!
- Oscillator Shift – Oscillating indicators like the RSI or stochastics are commonly used to identify reversals by analyzing slope, percentile, and/or divergence.
The more corroborating elements are present, the more confident you can be about a kicking reversal signal.
Even so, it would be difficult to form a successful trading strategy around any given candlestick pattern. There simply isn’t enough there to develop a strong edge. Even with a great understanding of trading math, order execution, market psychology, risk management, options, and automation, you’d still have a hard time.
In essence, kicking patterns are much better idea givers than trade makers.
Better yet, you’ll probably find more success building your strategy around other tools then using candlestick patterns as the final point of confirmation.
Other Candlestick Pattern Types
The kicking is but one of many candlestick patterns.
And while learning them all is not a prerequisite for successful trading, you’d certainly benefit from getting familiar with other candlestick pattern types.
They can be categorized in several ways.
The most straightforward way may be by the number of candlesticks (ie. 2-candlestick, 3-candlestick, 5-candlestick, etc.)
More helpful though, you can group them by price direction or signal type. That is, they can be bullish or bearish and/or imply reversal or continuation. Finally, you can multiply these designations together to separate them into bullish reversal, bearish reversal, bullish continuation, and bearish continuation categories.
On the other hand, you might just tackle them in alphabetical order:
- Abandoned Baby
- Breakaway
- Counterattack Line
- Doji Star
- Engulfing
- Harami
- Harami Cross
- Hikkake
- In Neck
- Kicking
- Ladder
- Last Engulfing
- Long Day
- Mat Hold
- Matching
- Meeting Lines
- On Neck
- Separating Lines
- Star
- Stomach
- Tasuki Gap
- Three Inside
- Three Line Strike
- Three Methods
- Three Outside
- Tri-Star
- Tweezer
- Window
Sure, there are quite a few. But don’t let that intimidate you.
It’s unnecessary to memorize the name and criteria of every single pattern. The key is to learn the principles of price action and technical analysis.
In fact, you’re free to forget all of their names and specifications as long as you can look at a group of candlesticks and understand what they are trying to tell you. It’s just that the more of them you learn about, the easier this will become.
So take the time to study at least a few more of them.
Takeaways
To review:
Kickings are a type of candlestick pattern that signal a potential reversal. While not a guarantee, their appearance may indicate that market conditions are changing. Thus, they can help you find winning trades.
Of course, there are other candlestick patterns that you should learn about. Still, the ability to recognize patterns is not enough to trade successfully on its own.
Nonetheless, you’ve now added one more tool to your toolkit.
Have questions or more information to add? Contribute to the conversation in the comments below! Or, if you know someone who could benefit from this post, share it with them. You can also check out our Candlestick Patterns Guide to improve your candlestick analysis skills.