What is Sushi Roll Reversal Pattern?

Stock trading involves many factors and denominators. This activity is both scientifically and arithmetical, with several charts and candlestick patterns helping to capture trends in stocks and other assets traded. These charts and patterns can be used to predict trends and price movements. You need to be able to recognize the differences between trending and reverse patterns as a trader. This article will explain the sushi roll reverse pattern.

What's a sushi roll reverse candlestick pattern?

The British writer Mark Fischer first used the term "sushi roll candlestick pattern" in his book "The Logical Trader", which he wrote. Sushi Roll can be described as a candlestick pattern with 10 bars. The inside bars are the first five bars. They are contained within a narrow or slim range of highs and lowers. The five remaining bars are known as the outside bars. They surround the first five bars by having both lower lows or higher highs. The result is a pattern that resembles a sushi roll. A trend reversal is indicated by the appearance of the sushi-roll pattern during a dominant trend. This pattern is very similar to the bearish and bullish-engulfing patterns . This pattern has several bars instead of just two bars.

What's a reversal?

First, let's define reversal. This will help us understand what a reversal is. A reversal occurs when the trend direction of stocks and traded assets changes or reverses. Reversals are signals that traders look for to signal them to exit their trade. This indicates that trading conditions might be less favorable. Reversal patterns can also signal new trades and a new trend.

Upward, and Downward Patterns

As with all stock market patterns traders are always on the lookout to spot uptrends or downtrends. As we have already mentioned, a potential trend reversal is indicated by a sushi roll reverse pattern appearing in a downtrend. This pattern signals traders that there is a possibility to either buy stocks or assets, or exit a short position. The sushi roll pattern can also be seen during an uptrend and signals traders to either sell long positions or enter short positions.

The pattern

Mark Fisher noted that the sushi roll reverse can be made up of 5-10 patterns. However, neither those numbers nor the lengths of the bars should ever be taken as a guideline. There may be a variety of bar patterns. You must identify which pattern is the most suitable for your trade as a trader. It is important to learn how to spot trends in the stock or commodity that you trade. You should also use a time frame that matches your preferred trading time.

Fisher also discusses a second trend reverse pattern. This pattern is for traders who are able to stay invested over the long term. It is also known as the "outside reversal week". The pattern is similar to the sushi-roll pattern, but it uses daily data from a trading week that begins every Monday and ends on Friday. The pattern is created by taking two trading weeks, or ten trading day, and occurs when the five-day trading within week is about to be followed by an outside week. This week, also known as an "engulfing week", has higher highs than lower lows.

Last note:

The sushi roll is a Japanese delicacy that most people associate with cured fish, rice, and wasabi. The sushi roll, however, is a stock activity pattern. It helps to analyse the performance of a stock stock and predict future trends.