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HaiderAli512
02-09-2022, 05:31 PM
Bullish Homing Pigeon Candlestick Pattern

*Asalam o alaikum* members
The bullish homing pigeon is a candlestick pattern where one large candle is followed by a smaller candle with a body located within the range of the larger candle's body. Both candles in the pattern must be black, or filled, indicating that the closing price was lower than the opening price.
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How a Homing Pigeon candlestick pattern is formed?
During a downtrend, a black candle is formed on the first day. The second candle is a short black candle showing a narrow trading range. It is also engulfed in the first line that shows that it is included in the first day’s trading range. This weakens the power of the downtrend. It predicts the arrival of buyers on the market which may result in a reversal of the trend.

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How to identify the pattern?
As we have already discussed that a Homing Pigeon candlestick pattern consists of two candle lines. It appears usually in the downtrend. Therefore, you should look for a two-line candlestick pattern in a downtrend. It should be a long black body on the first day followed by a second black body that is contained in the first body.

How to trade the pattern?

In a Homing Pigeon candlestick pattern, a trader should enter a long position. Placing the stop loss below the low of the pattern is a wise move. They can also place the stop loss below the low of the second line as well.

During a downtrend, traders should wait for enough for the prices to decrease after the formation of the Homing Pigeon pattern. Now, they should enter a short position, and placing the stop loss above will be a wise decision.

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