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This pattern consists of two candles representing two consecutive days. Usually found at the end of a down trend, it starts bearish with a large black candle on the first day however on the second day the price gaps up and finishes inside the first candle(contained).
This is the first sign that the bulls have started to take some control back and indicates a reversal of the trend.
This sentiment is enforced further by the bulls maintaining their control and closing on a high.
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Most candlestick patterns should appear close to previous resistance or support levels depending on what type it is. You should only trade a candlestick pattern if it's near these levels.
Don't trade using these patterns if it's not at the top or bottom of a trend. These patterns appear a great deal so you have to make certain you only trade at the right level.
This is very important as you will end up over trading them and you will end up losing more money than you imagined.
