Takuri candlestick pattern

The Takuri (or the Takuri line) is a single candlestick pattern that can be observed on price charts signaling the traders about the bullish reversal.

The bottom shadow is significantly longer than the up shadow, indicating that although the price fell below the open price during the timeframe, buyers stepped in by the end of the timeframe and the pattern body still managed to close near its open price. The small body is also an indicator of the small difference between the open and close prices, in other words, the market indecision and potential exhaustion of the selling pressure.

The Takuri pattern is similar to the Dragonfly Doji, which is characterized by a very short body at the top (like the doji candle has) and a long bottom shadow.

Another pattern similar to the Takuri is the Hammer. It is another pattern with a long bottom shadow and a short body (slightly longer than the Dragonfly Doji has) at the top that is signaling a potential bullish reversal. The only difference is that the length of the Hammer bottom shadow cannot be more than twice the length of its body while the length of the Takuri's bottom shadow cannot be more than three times shorter than its body. However, there is no harm in confusing them, as both patterns appear in the downtrend and trigger the bullish reversal (not trading advice).

Takuri candlestick:

• red or green candle
• appears at downtrend or within support zone
• short body at top of candlestick
• up shadow shorter than its body or absent
• bottom shadow is at least 3 times longer than candlestick body
• gap created at opening or at closing makes signal stronger

Traders often look for confirmation from subsequent price action, such as a bullish candlestick or a bullish trend continuation pattern.

It's important to consider the overall market context and use additional technical indicators to strengthen the trading decision.

The stop loss can be placed just below the body of the candlestick.