What is the Lollipop Pattern?
This is a visual pattern I observed based on long-term analysis of order flow. The appearance of this pattern is a high probability signal, but it cannot be used in isolation.
Visual Composition
Stick: The main body of the K-line (up or down);
Lollipop Head: The end of the pin bar, the dense accumulation of transactions. The larger the head, the greater the liquidity and the stronger the reverse momentum.
Key Identification Points: The head area is not hollow, but shows extreme accumulation of transactions/liquidations/Delta in the order flow;
Direction Neutral: Can appear at the top (inducing more buying for distribution) or at the bottom (inducing more selling for accumulation);
Common Subsequent Behavior: After the head absorbs liquidity, the price quickly starts in the opposite direction.
High-level lollipop market maker lures more buying to ship goods, and the pin bar constructs the "head", followed by a reversal and a fall.
Low-level lollipop market maker lures more selling to collect goods, and the pin bar constructs the "head", followed by a reversal and a rise.