Definition - When two black days occur and they both have equal closes during a downtrend, this signals a Bullish Matching Low. Despite the new low being somewhat tested and no follow through which is a good support price, this patterns suggests that a bottom has been made.
- On the first day, a black body will be observed in a market that is characterised by a prevailing downtrend.
- On the second day, another black candlestick follows and the two closing prices should match.
Patterns and Flexibility
In all, this pattern has two black candlesticks and they both close at the same mark. In terms of the first candlestick, it should be either normal or long in length.
Behaviour of Trader
With the process that occurs during this pattern, it shows short-term support and proves to be a concern for the bears as it progresses. When it comes tot the psychology of the traders, the daily trading action doesn’t actually have a huge effect. Instead, it is the fact that they have the same closing price that has the biggest impact.
Buy/Stop Loss Level
For there to be confirmation, the price has to cross above the confirmation level which, in this case, is the midpoint of black body from day one. In terms of the stop less level, this will be the lower of the previous two lows. If prices fall and reach lower than the stop loss level two days in a row following the buy, the stop loss will be triggered if there is no bearish pattern to be seen.