Ladder Bottom

Ladder Bottom

The Ladder Bottom is a five candle bullish reversal formation. The pattern occurs during a downtrend, with the first three candlesticks are black with successive lower opens and close. The fourth day is a black candle with only an upper wick. The fifth day is a white candlestick that opens above the body of the fourth.


• After an established downtrend, three red days with consecutively lower closes occur
• The fourth day is a red day with an upper wick. An Inverted Hammer
• The fifth day is a blue day

The first several days establish a consistent downtrend. As time progresses however shorts take the opportunity to par-off their positions and take profit. This is illustrated in the fourth days red Inverted Hammer candle. As prices are bid up, the high is pushed up. But in this formation sellers are still able to drive price down to levels nearer the open creating a small body. Up to day-four in the formation this just suggests that sellers are losing firm control of the market. By the fifth day, a bullish rally creates the long blue candle. Candlestick analysts would look for buy entry opportunities to come.