Understanding the Stalled

What is the Stalled?

The Stalled pattern is a bearish reversal candlestick pattern that signifies a potential end to an uptrend. It consists of a series of candles that show a weakening momentum in the market. Specifically, this pattern can appear as a series of similar-sized candlesticks, typically showing diminishing upward movement and closing near their opening prices.

How is the Stalled Identified?

The Stalled pattern is identified by:

1. Series of Candles: A sequence of candles where each subsequent candle shows diminishing upward movement.
2. Small Body: Each candle in the series has a small body, indicating reduced buying pressure.
3. Consistent Close: The closes of the candles are near the opening prices, showing that buyers are losing control.

When to Use the Stalled

The Stalled pattern is used to:

• Identify Bearish Reversals: Detect a potential shift from an uptrend to a downtrend.
• Evaluate Market Strength: Assess if the upward momentum is weakening and prepare for a potential reversal.
• Adjust Trading Strategies: Modify trading strategies based on the anticipation of a reversal.

Formula Example

To identify the Stalled pattern:

1. Uptrend Preceding the Pattern: Ensure the pattern forms after a significant uptrend.
2. Pattern Characteristics:
   • Series of Similar Candles: Multiple candles with similar small bodies.
   • Diminishing Upward Movement: Reduced upward movement with each subsequent candle.
   • Consistent Close: Candles close near their opening prices, indicating a stall in buying momentum.

For example:

• After an uptrend, if you observe several consecutive candles with small bodies and closes near their openings, it could indicate the Stalled pattern, suggesting a possible bearish reversal.

Parameters

The parameters for identifying the Stalled pattern include:

• Data: Defines the type of data to use for the pattern.

  • Value: ohlc
  • Description: The pattern uses Open, High, Low, and Close prices.

• Previous N Candles: Number of preceding candles to check.

  • Default Value: 1
  • Min Value: 1
  • Max Value: 300
  • Description: Checks for the Stalled pattern in the last N candles.

Conclusion

The Stalled candlestick pattern serves as a potential indicator of a bearish reversal following an uptrend. Recognizing the pattern's key characteristics helps traders anticipate market shifts and adjust their trading strategies accordingly.