Here's what it looks like:
- First candle: A bearish candle that has a descending closing price.
- Second candle: A bullish candle that opens below the close of the previous candle and closes above its maximum, completely absorbing the body of the previous candle.
Bullish Absorption indicates the strength of bullish pressure and a possible continuation of price growth. It is considered a signal to open a buy position or strengthen an existing position. However, as with any other pattern, it is important to take into account the market context and additional factors to make an informed trading decision.
Traders can use Bullish Takeover in combination with other indicators and strategies to confirm the signal and increase the probability of successful trading. It is also important to take into account trading volumes and support/resistance levels to confirm the strength of the pattern.
When using Bullish Takeover, it is important to remember the risks and conduct a thorough market analysis before making decisions. This pattern does not guarantee success, and it should be used in combination with other analysis tools to make informed trading decisions.