MATCHING LOW DEFINITIONThe matching low candlestick pattern is a...

MATCHING LOW DEFINITIONThe matching low candlestick pattern is a bullish reversal signal. It is comprised of two red candlesticks that arise after a clear downtrend is in place. The first candlestick is a long red body that closes at the low of the bar. The second candle in the matching low formation gaps up on the open, but is unable to hold the gains and closes at the same low of the previous bar. The psychology behind this formation is that a low has been successfully tested without any follow through. Longs should wait for the high of the second candlestick to be exceeded prior to taking a position.