Flat Tops and Bottoms

Forex Maniac > Japanese Candlestick Patterns > Flat Tops and Bottoms

Flat Tops and Bottoms is a complex type of figures, which include the formations of a large number of candles. The main feature of these figures is their flat shape.

Dumpling Tops And Fry Pan Bottoms

Dumpling Top consists of a set of candles with small shadows; these candles form the shallow peak of the trend. Downward gap follows the peak and confirming the trend reversion.

Dumpling Top

Dumpling Top has a counterpart in Western Analysis technique; it is called Rounded Top. The important part in the identification of this model is the gap, which must follow the peak.

Fry Pan Bottom

Fry Pen Bottom arise on the dawning market when the prices form a hollow cavity. As in the case with Dumpling Top, this figure should be confirmed by the price gap in an upward direction.

Such patterns represent how organically drops interest of the traders in ongoing tendency without any outside stimulation (aka news releases, economic statistics, etc.). The momentum of the price starts to drop; this makes the angle of the trend more hollow, reversing eventually; range of the price fluctuations (distance between Highs and Lows of the candles) falls. Finally, when the majority of the traders gets this signal and decides to open new positions or to fix profits, reversal movement starts with the gap.

Top and Bottom Towers

Top Tower

Top Tower is an uptrend-downtrend reversal model. This pattern occurs during upward movement, a couple of a big rising(white) candles signalize about the ongoing upward trend; then the momentum of the price starts to fall, volatility starts to fall, candles become shorter. After this slowdown, the long downing candle, or even couple of the tall dawning candles, appear. This long dawning (black) candles associated with Towers.

Bottom Tower

Bottom Tower is formed in the lower part of the downtrend after a combination of long downward candles followed by the short pause (one or several shrinking candles) comes long white candle, which indicates the possibility of reversal.

The closest analog to the Bottom Tower in western analysis techniques is V-bottom reversal model.

Both Towers, Top and Bottom Towers, are like the Dumpling Top and Fry Pan Bottom. The main difference between this figures that Towers has long candles on both sides of reversal. On the other hand, Dumpling Top and Fry Pan Bottom has gaps between hollow parts and start of the new trend.

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