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A Stick Sandwich is a three-candlestick pattern that’s formed when the middle candlestick is oppositely colored of the candlesticks on either side of it.

The first and third candlesticks will have a larger trading range than the middle candlestick, and as a result, the pattern looks like an upright sandwich.

Stick Sandwich patterns can be both bullish and bearish.
Stick Sandwich

To identify a Stich Sandwich, look for the following criteria:

  • There must be three candles in a row.
  • The middle candle must be the opposite color of the candles on either side of it.
  • A bearish Stick  Sandwich will run “white-black-white” or “green-red-green”.
  • A bullish Stick Sandwich will run “black-white-black” or “red-green-red”.
  • The candles on each side must have larger trading ranges than the middle candle, making them taller than the middle candle.
  • The middle candle must be shorter so that it is engulfed by the first and third candle.
  • The bullish Stick Sandwich must occur during a downtrend, while the bearish Stick Sandwich must occur during an uptrend.

Meaning

Since the Stick Sandwich can occur in both uptrends and downtrends,make sure to pay attention to the candles’ colors.

What color are the candlesticks on either side? What color is the candlestick sandwiched in the middle?

In a bullish market, the bulls are in control until the second candle forms.

This candlestick shows that buying pressure may be ending. In a bearish market, the opposite is true.

Because the two candles on each side of the signal have equal closing prices, the pattern has strong support, and the probability of a reversal is high.

The fact that both of the candlesticks have closed at the same level shows that a support level has been established.

Look for the confirmation level, which is the midpoint between the last two closes.

Be sure that the price crosses above (for bullish) or below (for bearish) this point before you move forward.

Look at the last candlestick for cues, especially its closing price.

Make sure that you wait for the third candlestick’s high (for bullish Stick Sandwich) or low (for bearish Stick Sandwich) to break.