- Kangaroo tails with a very long tails.
- Kangaroo tails with much room to the left. The ideal kangaroo tails print at an area on the chart that has not seen price action in a long time.
- Bullish kangaroo tails with a closing price that is higher than the opening price.
- Bearish kangaroo tails with a closing price that is lower than the opening price.
- The candlestick after the bullish kangaroo tail trades higher than the high of the kangaroo tail.
- The candlestick after the bearish kangaroo tail trades lower than the low of the kangaroo tail.
- Kangaroo tails with a greater range than the previous 10 candlesticks.
- Kangaroo tails that trigger the buy stop or sell stop entry on the first candlestick after the kangaroo tail.
There are also several red flags, so watch out for these:
- Kangaroo tails with very short tails.
- Kangaroo tails that do not print on a zone; these are not valid kangaroo tails.
- Kangaroo tails preceded by giant candlesticks. This suggests that the trend may continue, and the kangaroo tail may only be a pause.
- When the open and the close of the kangaroo tails are not contained by the range of the previous candlestick.If you back-test the kangaroo tail, you may find that this trade set-up consistently identifies key turning points in the market.