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Stick Sandwich Trading Pattern Explained- (Trading Strategy and Backtest | Definition & Meaning)

Last Updated on 10 February, 2024 by Rejaul Karim

Candlestick patterns are some of the most popular tools in technical analysis, providing traders with easy to read and clear representations of market price data. One such candlestick pattern is the stick sandwich.

A stick sandwich trading pattern is a candlestick formation that’s both bullish and bearish, and signals a reversion of the trend. Depending on whether the pattern is bullish or bearish, it will look a little different.

In this article, we’ll cover the bullish and bearish sandwich candlesticks. You will learn their meaning, definition, and how you could improve the patterns to be worth trading.

Let’s start!

Definition of Bullish and Bearish Stick Sandwich

We’ll define both patterns one by one, to make it clearer. As you will see, they’re inverted versions of one another

Bullish Stick Sandwich

Here is how you identify a bullish stick sandwich

  1. The first bar is negative
  2. The second bar open above the close of the previous bar, and closes above the previous bar’s open
  3. The third candle engulfs the second candle, by opening above its close and closing below its open, around the level of the first bars close.

Traditionally, the bullish stick sandwich is believed to form during an uptrend, and signal the reversal of the bullish trend into a more negative one.

 

Stick Sandwich Trading Pattern Explained- (Trading Strategy and Backtest | Definition & Meaning)

Bearish Stick Sandwich

Here is how you identify a bearish stick sandwich:

  1. The first bar is positive
  2. The second bar is negative, and opens below the close of the first bar. If finally closes below the open of the previous bar.
  3. The third candle is positive and completely engulfs the second candle, closing around the of the first bars’ open.

The bearish stick sandwich is believed to appear in an uptrend, and signal the reversion of the trend.

As you see, both patterns quite closely resemble a sandwich in shape, which is where they’ve got their names from.

Here you can find our Candlestick pattern archive with many articles covering the subject.

FAQ

How is the bullish stick sandwich identified?

The bullish stick sandwich is identified by a negative first bar, a second bar opening above the close of the first, and closing above the previous bar’s open. The third candle engulfs the second one by opening above its close and closing below its open, around the level of the first bar’s close. This pattern is traditionally believed to form during an uptrend, signaling a reversal.

How is the bearish stick sandwich identified?

The bearish stick sandwich is identified by a positive first bar, a negative second bar opening below the close of the first, and closing below the open of the previous bar. The third candle is positive and completely engulfs the second candle, closing around the level of the first bar’s open. This pattern is believed to appear in an uptrend, signaling a potential reversal.

How can traders improve the reliability of stick sandwich patterns?

To improve reliability, traders may consider additional filters or conditions. Backtesting is crucial to determine the effectiveness of these patterns in specific markets and timeframes. While stick sandwich patterns provide valuable insights, trading them on their own may not be sufficient. Traders often use additional technical analysis tools and conditions to enhance the reliability of their signals.

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