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Tower Bottom Candlestick Pattern

Traders search for Candlestick reversal patterns usually. A reversal pattern denotes a rapid shift in the market’s trend. A bullish reversal, for instance, indicates that the market will rise. A bearish reversal shows that the market is turning downward from an uptrend, and vice versa.

Reversal patterns alert traders to potential changes, allowing them to establish long positions or take precautions against any downturn when the trend shifts to the downside. 

tower bottom candlestick patterns

Definition

The tower bottom candlestick patterns are reversal patterns with bullish nature. The tower bottom is the opposite of the tower top. 

A variety of observations are required to evaluate the correct patterns because of the slow progression to develop visibly obvious patterns. Such patterns typically manifest near the end of an extended fall in a company’s stock price.

A huge candlestick or a series of minor bearish candlesticks in succession (red) might constitute the pattern’s bearish portion. A slowing on the subsequent candlesticks causes the price to move laterally with small candlesticks (which form the bottom).

The structure is completed by one or more huge bullish candlesticks (green). When a Bullish Harami candlestick pattern forms, a Bullish Tower Bottom candlestick pattern may occasionally follow. A Bullish Tower Bottom candlestick pattern may emerge after a Bullish Harami candlestick pattern.

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Conditions for Tower Bottom Candlesticks

The conditions for Tower Bottom Candlestick are as follows:

  • The color of the first high candlestick is typically green but can alternatively be red, as shown in the picture above.
  • The two to five short candlesticks emerge between the two high candlesticks.
  • The mid-short candlesticks can be both red or green. 

Interpretation

Demand and supply play a great role in the emergence of the Tower Bottom Candlestick pattern. The first large (red) bearish candlestick will emerge after an ongoing bearish trend, indicating that sellers are in absolute command and have used all of their momenta to drive the market lower.

Buyers will enter the market now that the sellers have spent all of their strength. Right now, buyers still lack the strength to defeat sellers. Because of this, a range price structure will see lateral price movement. A large bullish candlestick will develop after a sideways market, signaling that buyers are in power and the trend has shifted. 

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Conclusion

Price charts might appear to be a difficult subject to understand. These regular patterns will become more familiar to you as you study candlestick charts. As time goes on, you will discover more patterns and pattern combinations that you may use to assess the state of the market, predict its developments, and pinpoint market trends.

The Tower Bottom candlestick pattern is an important pattern for understanding the direction of the market. The colour and shape of this candlestick on a candlestick chart can aid traders in determining if an uptrend is part of a bullish trend or is merely a bearish peak. A subsequent bullish candlestick’s low price is the result of the preceding bearish candlestick’s continuation of a downtrend by closing at or near a new low. 

Saman Ali

Saman Ali is a Professional Financial Researcher, Quantitative Analyst and an Experienced Writer for more than 5 years. Saman’s main passion is for Cryptocurrencies, Stocks, Forex and Blockchain Technology. She holds an MBA in Finance and has specializations in producing high quality content about Cryptocurrencies, FX, Broker’s review, Price Predictions, Fundamental & Technical Analysis, and Educational Content.

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