What Is a Reverse Kangaroo
A reverse kangaroo is a technical price pattern used in trading. It is a variation of the kangaroo tail, marked by a long wick or tail extending in one direction with a small body near the opposite end. The pattern suggests a potential shift in short-term momentum.
How the Reverse Kangaroo Pattern Works
The pattern appears after a move in one direction. A long tail forms, often from a sharp rejection of price, while the body stays compact at the opposite extreme. Traders watch for confirmation from volume and follow-through candles before treating it as a reversal signal.
Trading Considerations and Risks
Traders may use the reverse kangaroo to plan entries or exits, often combining it with support, resistance, or trend analysis. Because the pattern can produce false signals, risk management is essential. For more on candlestick patterns and market structure, see Investopedia.
