The kicker pattern is considered one of the most powerful and reliable candlestick reversal signals in technical analysis. When a kicker forms, it represents a dramatic and sudden shift in market sentiment. In this guide, we will cover both bullish and bearish kicker patterns and how to trade them effectively.
What is a Kicker Pattern?
A kicker pattern is a two-candlestick reversal pattern characterized by a gap between the two candles where the second candle opens in the opposite direction of the first candle's body. The dramatic gap creates a "kick" that reverses the prior direction.
Key characteristic: The defining feature of a kicker is that the second candle gaps away from the first candle in the opposite direction. This creates a situation where there is no overlap between the candles, signaling an extreme shift in sentiment.
Why Kicker Patterns Are So Powerful
Kicker patterns are considered among the most reliable reversal signals because:
- Sudden sentiment shift: Something dramatic happened overnight to completely reverse sentiment
- Trapped traders: Traders on the wrong side are immediately underwater with no chance to exit
- Self-fulfilling: The pattern is widely recognized and attracts more traders
- Clear signal: There is no ambiguity with kicker patterns
Bullish Kicker Pattern
The bullish kicker forms after a downtrend or bearish candle and signals a potential reversal to the upside.
Bullish Kicker Structure
- First candle: A bearish (red) candle, often continuing a downtrend
- Second candle: A bullish (green) candle that gaps up and opens at or above the first candle's open
- No overlap: The second candle's low should not touch the first candle's body
Bullish Kicker Example
Stock XYZ is in a downtrend. On Monday, it drops from $50 open to $46 close (bearish candle). Overnight, positive news breaks. On Tuesday, it gaps up to open at $51 and closes at $54 (bullish candle). The gap up above Monday's open creates a bullish kicker pattern.
Bearish Kicker Pattern
The bearish kicker forms after an uptrend or bullish candle and signals a potential reversal to the downside.
Bearish Kicker Structure
- First candle: A bullish (green) candle, often continuing an uptrend
- Second candle: A bearish (red) candle that gaps down and opens at or below the first candle's open
- No overlap: The second candle's high should not touch the first candle's body
Bearish Kicker Example
Stock ABC is in an uptrend. On Thursday, it rallies from $80 open to $85 close (bullish candle). Overnight, bad earnings are released. On Friday, it gaps down to open at $78 and closes at $73 (bearish candle). The gap down below Thursday's open creates a bearish kicker pattern.
How to Trade Kicker Patterns
Entry Strategy 1: Immediate Entry
Enter at the close of the second candle or the open of the third candle.
Immediate Entry Setup
- Identify the kicker pattern (gap in opposite direction)
- Enter long (bullish) or short (bearish) at second candle close
- Stop loss beyond the first candle's extreme
- Pro: Captures the full move if reversal continues
- Con: Higher risk if the pattern fails
Entry Strategy 2: Pullback Entry
Wait for a minor pullback after the kicker before entering.
Pullback Entry Setup
- Wait for the pattern to form and initial momentum
- Enter on a pullback toward the gap area
- Stop loss just inside the gap
- Pro: Better entry price and tighter stop
- Con: May miss the trade if no pullback occurs
Stop Loss Placement
Place your stop loss strategically:
- Bullish kicker: Below the low of the second candle or the first candle
- Bearish kicker: Above the high of the second candle or the first candle
- Key principle: If price fills the gap completely, the pattern has failed
Profit Targets
- Target 1: Recent swing high/low from the prior trend
- Target 2: Key support/resistance levels
- Target 3: Trailing stop to capture extended moves
Complete Trading Example
Bullish Kicker Trade on Stock DEF
Stock DEF shows a bullish kicker pattern:
- Monday: Opens $40, closes $36 (bearish candle after downtrend)
- Tuesday: Gaps up, opens $42, closes $46 (bullish kicker)
Trade execution:
- Entry: $46.25 at Tuesday close
- Stop loss: $35.50 (below Monday low)
- Target 1: $52 (previous resistance)
- Target 2: $58 (next resistance level)
Risk: $10.75 | Reward: $5.75-$11.75 | R:R: 0.53:1 to 1.09:1
Note: Kickers often have wider stops due to the gap, but they also have higher success rates.
Volume Confirmation
Volume adds important confirmation to kicker patterns:
- First candle: Normal to high volume (trend continuation)
- Second candle: Should have significantly higher volume
- Interpretation: High volume confirms the dramatic sentiment shift
Pro tip: Kicker patterns often occur on major news events like earnings announcements, FDA decisions, or economic data. The fundamental catalyst adds validity to the technical signal.
Common Mistakes to Avoid
- Partial gaps: The gap must be complete with no overlap between candle bodies
- Ignoring context: Kickers are most powerful after clear trends
- Too tight stops: Kickers need room; stop below/above the entire pattern
- Chasing: If you miss the entry, wait for a pullback
- Forcing patterns: True kickers are rare; do not see them where they are not
Gap Fill Consideration
One risk with kicker patterns is the gap filling. Some gaps get filled quickly, which would invalidate the pattern. Consider:
- Kickers with fundamental catalysts are less likely to fill
- Kickers at key support/resistance levels are stronger
- If the gap starts to fill, consider exiting early
Track Your Pattern Trades
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Summary
Kicker patterns are among the most powerful reversal signals in candlestick analysis. The key requirement is a gap that opens in the opposite direction of the first candle's body, creating a dramatic sentiment shift. While they have higher success rates than most patterns, they also require wider stops due to the gap. Trade them with respect for their power, use proper risk management, and confirm with volume when possible.
Want to learn more reversal patterns? Check out our guides on the abandoned baby pattern and dark cloud cover pattern.