The Hot Dog pattern
Quick answerThree candles: a red one, a big green one with the highest high (the "hot dog"), and a red one, like a hot dog in its bun. The first close above the middle candle's high is the buy.
The details
The shape (a bullish Hot Dog)
- A red candle.
- A green candle with a bigger body than both of its neighbours and the highest high of the three: the hot dog.
- Another red candle.
The two red candles are the bun. A bearish Hot Dog is the mirror: green, a big red one with the lowest low, green.
The trigger
The pattern arms a level at the middle candle's high. The first close above it is the breakout (why the close).
The trade we use (Hot Dog 2.0)
- Entry: the breakout close.
- Stop: the low of the three candles.
- Target: twice the risk.
- Still open 20 candles on, it closes at that candle.
Our Hot Dog system watches for it and calls the setups that tested best.
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