Another type of candlestick reversal pattern is the two-day reversal pattern. Again, this kind of reversal signals that the general direction of the market is changing, but the change occurs over two days. These patterns appear at an extreme up or down trend in the market, so many traders watch for these patterns so that they can manage their own position in the market.
Like one-day reversal patterns, a two-day reversal pattern can be either bullish or bearish. In this section, we’ll look first at bullish and then bearish reversal patterns.
The most common bullish reversal patterns are the bullish engulfing pattern and the piercing line pattern.
In contrast, the two most common bearish reversal patterns are the bearish engulfing pattern and the dark cloud cover pattern.
Again, recognizing these reversal patterns in a trend helps traders make decisions about their position and prepare for movement in the market.