Japanese candlesticks - Deliberation
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Deliberation
Definition: A deliberation structure is comprised of three Japanese candlesticks. All three are bullish (green). The first is a candlestick with a small body followed by a large full candlestick. Finally, the last candlestick also has a small body and forms a star.
Illustration:
Characteristic: A deliberation structure often forms after a significant increase characterized by several large green Japanese candlesticks.
Significance: A deliberation structure is a reversal pattern, it indicates a reversal of the bearish trend. This reflects the weak side of the bullish movement and a type of excess on the second candlestick. It is the contrast between the large and the small candlesticks that shows the buying currant's exhaustion.
Note: The third candlestick can be above (traditional shape) or just below the highest point (shoulder surfing) of the second candlestick.
Invalidation: If the next candlestick is not bearish or does not open onto a bearish gap, the deliberation structure is invalidated.
Inverse deliberation
Definition: An inverse deliberation structure consists of three Japanese candlesticks. All three are bearish (red). The first is a candlestick with a small body followed by a large full candlestick. Finally, the last candlestick also has a small body and forms a star.
Illustration:
Characteristic: An inverse deliberation structure often forms after a significant drop characterized by several large red Japanese candlesticks.
Significance: An inverse deliberation structure is a reversal pattern, it indicates a bullish trend reversal. This reflects the weak side of the bearish movement and a type of excess on the second candlestick. It is the contrast between the large and the small candlesticks that shows the selling currant's exhaustion.
Note: The third candlestick can be under (traditional shape) or just above the lowest point (shoulder surfing) of the second candlestick.
Invalidation: If the next candlestick is not bullish or does not open onto a bullish gap, the inverse deliberation structure is invalidated.
