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Five candles marking the end of a decline. Three steps down the ladder, then reversal signals, then confirmation.
The Ladder Bottom is a five-candle bullish reversal pattern that forms at the bottom of a downtrend. Three consecutive bearish candles (like a ladder descending) are followed by a bearish candle with an upper shadow, then a bullish candle that gaps up or opens above the prior candle.
The pattern shows a methodical decline reaching its end. The three bearish candles are the 'ladder' stepping down, the fourth candle shows hesitation (the upper shadow reveals buying pressure emerging), and the fifth candle confirms the reversal with a strong bullish move.
The Ladder Bottom shows a structured descent that runs out of steam. Candles 1, 2, and 3 are orderly bearish candles — each opens within the prior body and closes lower. This is disciplined selling, not panic. The descent is methodical like walking down a ladder.
Candle 4 is bearish but has a notable upper shadow. Bears still close lower, but during the session, buyers pushed price significantly higher before being rejected. This upper wick is the first real sign that demand is emerging at these levels.
Candle 5 is the confirmation — a bullish candle that gaps up or opens above Candle 4. The sudden shift from orderly decline to bullish gap signals that the selling is exhausted and buyers are taking control. The reversal is underway.
Conservative: Enter long on a break above Day 5's high.
Aggressive: Enter long at close of Day 5.
Below the low of the pattern (the lowest point of the three declining bearish candles). This is the maximum pain point - if broken, sellers have regained control.
T1: The open of the first bearish candle in the pattern. T2: Previous swing high. The five-candle structure represents a gradual shift, so expect measured rather than explosive moves.
Minimum 1:2. The multi-candle pattern creates a wider stop, so position size accordingly.
The Ladder Bottom is a rare pattern but highly reliable when all five candles are present. The transition from orderly decline to emerging demand (Candle 4's shadow) to bullish confirmation (Candle 5) tells a complete reversal story.
Five candles making lower lows, then a reversal. The extended decline exhausts sellers completely.
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