The Matching Low candlestick pattern is a two-candle formation that in theory is supposed to act as a bullish reversal signal. But according to Bulkowski’s testing, and likely due to the fact that this candlestick formation appears mostly in downtrends, the Matching Low pattern acts as a bearish continuation pattern around 61% of the time.
The first candle is a regular sized bearish candle.
The second candle is also a bearish candle, usually smaller, that closes at the exact same closing price as the first candle. Upper and lower wicks are irrelevant.
The theory behind this pattern being a bullish reversal pattern is that because the two bearish candles share the same closing price, then that level should be support, and naturally we as traders assume price will move upwards. But as you can see with the performance statistics, price usually has no trouble breaking that supposed support level.
But luckily this pattern makes up for its directional inconsistencies by being fairly common with a surprisingly strong trend after breakout.