Dumpling Top (Peak), as opposed to Fry Pan Bottom (Bottom) is two reversal pattern, created from many small body candles. These candlestick patterns are rarely mentioned in the forex world, but to ensure we do not miss good trading opportunities, in this article we will introduce you to the characteristics and how to use them. The two models above with real examples.
What is Dumpling Top - Fry Pan Bottom?
Dumpling Top (Dinh Bang) is a reversal pattern, consisting of many small candles, initially increasing slightly, then moving sideways and eventually turning to a downtrend, completed when a gap appears. .
Due to the shape of this model, it is named after the dumpling dish, with short candle bodies forming an arc facing upwards and characterized by a flat top.
Fry Pan Bottom is a model that is the opposite of Dumpling Top. The Day Bang pattern consists of many small candles, initially falling slightly, then moving sideways and finally turning to an uptrend, completing when a gap appears.
The shape of the model is like a fry pan with short candle bodies forming an arc facing down, characterized by a flat bottom.
Features of Dumpling Top - Fry Pan Bottom
Dumpling Top and Fry Pan Bottom models have the following characteristics:
- Appears at the end of the uptrend for Dumpling. Top of the downtrend for Fry Pan Bottom
- The candles have small stems
- There must be a price move sideways to create a flat top or a flat bottom
- In the forex market, there may be no need for a gap at the bottom of the model.
Psychological evolution of the Dumpling Top - Fry Pan Bottom model
For the Dumpling Top model, the market sentiment is as follows:
After an uptrend lasts for a while, prices rise to new highs that make it no longer attractive to buyers, besides, some traders who have entered the previous order will start taking profits, causing prices to fall. Acceleration and slowing down. After that, prices started to accumulate sideways, showing that buyers showed signs of exhaustion, unable to move prices further. When the price has accumulated for a while, the strength of the buyers is clearly weak, the seller will start to enter the order as well as the previous buyers feel that the trend has ended, they cut losses leading to the price falling, creating The Dumpling Top model.
Psychological movements of the Fry Pan Bottom model are similar to the above but in the opposite direction.
Guide to trading with Dumpling Top - Fry Pan Bottom
After we have identified the Dumpling Top / Fry Pan Bottom pattern by looking at the direction, candle height and flat top / bottom shape, we will proceed to set up a trade.
Because these two models are a reversal pattern, we enter a sell order for Dumpling Top and a buy order for Fry Pan. Below, we will show you how to trade for each model through the actual forex trading example
Instruction to trade with Dumpling Top model
The steps of dealing with Dumpling model
- When the price is flat to create a top, draw a price channel with a top and a bottom line as shown
- Wait until a candle breaks out of the top and breaks below the lower channel
- Normally, the price will go back to check the peak area, so we can place pending orders to sell in this zone.
- Place a stop loss at the top of the pattern
- Place profit taking at the support areas below.
Below is an example of how to enter a sell order for the Dumpling Top pattern on GBPJPY chart, date time frame.
The steps of dealing with Dumpling model
- When the price is flat to create a top, draw a price channel with a top and a bottom line as shown
- Wait until a candle breaks out of the bottom area and breaks below the upper channel
- Normally, the price will come back to check the bottom area, so we can place a sell order in this area.
- Place a stop loss at the bottom of the pattern
- Place profit taking at the overhead resistances.
Below is an example of how to enter a buy order for the Fry Pan Bottom model on the same GBPJPY chart mentioned above. This chart is quite interesting when creating our two models consecutively.
Epilogue
Unlike other Japanese candlestick models that usually have 1-3 candles, Dumpling Top and Fry Pan Bottom are two models made up of many small body candles. Besides introducing model features, we also have detailed trading instructions. Hope you will apply this knowledge effectively.
You have just read the article: "Dumpling Top - Fry Pan Bottom candle pattern"
Author: Tin Nguyen
Do not forget Prefer and Share This article will you do?
0 Comments